CBO Data: Skilled Nursing Industry Faces $6.35 Billion of More Medicare Cuts

A financial analyst estimates the skilled nursing sector will face cuts of $6.35 billion in the next nine years, after analyzing data from the Congressional Budget Office’s (CBO) recently released March 2012 Medicare Baseline, which reveals projected cuts in Medicare payments to skilled nursing facilities this year compared to 2011.

While skilled nursing facilities received $31.4 billion in benefits payments in 2011, according to the CBO, that amount is expected to decrease to $30.6 billion in fiscal year 2012, and increase only slightly to $31.9 billion in 2013.

That represents a -2.8% growth rate in payments between 2011 and 2012, after a positive 15.8% growth in 2011.


Recent analysis on CBO data shows the skilled nursing industry being hit with an estimated $6.35 billion in payment reductions in the next nine years under the budget act’s sequestration, according to Ipsita Smolinski, president of health care policy consulting firm Capitol Street. This comes in addition to the average 11.1% cuts to reimbursements that went into effect in October 2011.

Other inpatient payments will also face huge reimbursement reductions, including long-term acute care hospitals, hospice, and home health, at more than $12 billion combined in the next nine years.

The Alliance for Quality Nursing Home Care is strongly against further Medicare payment reductions to the skilled nursing industry, calling them “untenable to patients and providers.”


“Simply returning again and again to provider cuts is the wrong answer, and is having serious, negative consequences for patients, caregivers, and local jobs,” Alan Rosenbloom, president of the Alliance, said in a statement. “Instead, rationalizing the Medicare post-acute payment system, which will save Medicare resources, must be a congressional priority.”

View the CBO’s March 2012 Medicare Baseline.

Written by Alyssa Gerace