CMS to Raise Skilled Nursing Payments by 2% in 2015

Skilled nursing facilities will see a 2% increase in reimbursements in fiscal year 2015 thanks to a proposed rule from the Centers for Medicare and Medicaid Services.

CMS on Thursday issued a proposed rule outlining fiscal year 2015 Medicare payment rates for skilled nursing facilities. Aggregate payments to skilled nursing facilities in 2015 will increase by a projected $750 million compared to the previous year.

This represents a higher payment update factor than the 1.3% update that was finalized for skilled nursing reimbursements last year. The estimated increase is attributable to 2.4% market basket increase, reduced by the four basis point multifactor productivity adjustment required by law, notes CMS in the announcement. 

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“America’s skilled nursing care centers are pleased to see a proposed two percent market basket increase to providers’ Medicare reimbursement,” said Mark Parkinson, president and CEO of nursing home trade group the American Health Care Association, in a statement. “These centers have shared in the sacrifice plenty through multiple government reductions over recent years. A stable Medicare payment system is essential in keeping skilled nursing care accessible to our seniors.”

CMS is also proposing a revision to its current Change of Therapy (COT) Other Medicare Required Assessment (OMRA) policy to address a provider concern regarding a technical aspect of the resident classification rules for new resource utilization groups (RUGs). The revision would allow providers to use the COT OMRA to reclassify a resident into a therapy RUG from a non-therapy RUG in certain limited circumstances.

View the proposed rule on the Federal Register. 

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Written by Alyssa Gerace

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  • Why Costs Rise at Nursing Homes…
    One consideration that is often missed as to why costs increase significantly in nursing homes is that the health problems of nursing home residents are becoming worse (in industry parlance, the acuity levels of residents are rising).

    For seniors, the rise of Assisted Living facilities provide many of the services that USED TO BE provided by nursing homes. Nursing homes today are becoming more like "mini-hospitals" where residents are provided with more care than years before. It's a change that happens over time so it is easy for people to miss or to misunderstand, yet it is happening nonetheless.

    So, even when a statistical analysis of nursing home costs over the years are compiled, in many cases, it's still not an apples-to-apples comparison due to the higher levels of acuity and higher levels of service that are being provided within a nursing home.

    Chris Foley
    Sr. Vice President – Equity Seniors Housing Brokers & Advisors
    CPA (Retired)
    (614) 915-8835
    [email protected]

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