Nursing Home Trade Group: We Can Save Medicare $2 Billion

The American Health Care Association (AHCA) offered solutions on post-acute care reform that could save the Medicare program billions. 

In a response issued today to the Senate Finance Committee and the House Ways and Means Committee, AHCA outlined its legislative proposal to reduce hospital readmissions from skilled nursing facilities (SNFs), guaranteeing $2 billion in savings to Medicare over a 10-year budget window. 

The trade group also reiterated that while the average SNF Medicare margin is close to 10%, the average total SNF operating margin is calculated to be between 1% to 3%. 


AHCA encouraged incentivizing improvement by connecting payment with quality outcomes, specifically support of site neutral payment reforms so that payments may be focused on patients, not settings. 

The trade group also outlined its thoughts regarding emerging proposals such as value-based purchasing and bundled payments for services. However, AHCA cautioned Federal agencies and Congress to gather more information on the initiatives and their impact before fully implementing any major programs. 

AHCA also warned against further reductions to Medicare bad debt reimbursement because the use of post-acute care services is increasing with the aging populations, and the options for providers to look to states for bad debt reimbursement are dwindling. 


“We have policy solutions that create incentives for providers that can not only contain costs, but also improve quality of care,” said Mark Parkinson, president and CEO of AHCA. “We recognize the importance of these services for the people and families we serve, as well as the importance of identifying efficiencies to address Medicaid budgetary pressures.”

An agreement was announced in May to combine operations with fellow industry trade group The Alliance for Quality Nursing Home Care, effective July 1, to form one organization known collectively as AHCA. 

Written by Jason Oliva

Companies featured in this article: