[Update] Post-Acute Providers Applaud Historic Medicare Payment Fix

Skilled nursing operators and other post-acute providers can look forward to more stable reimbursements in the future, thanks to the historic passage of a bill to change how Medicare sets payment rates.

The Senate approved H.R. 2, the Medicare Access and CHIP Reauthorization Act (MACRA,) late Tuesday in a 92-8 vote, and President Barack Obama on Thursday signed it into law. The House of Representatives had passed the measure in a 392-7 vote in late March.

Medicare has been an increasingly important payer in the post-acute space in recent years, as more providers across the post-acute continuum have begun to offer short-term rehabilitation services such as physical, occupational and speech therapy.


An amendment to repeal an annual cap on the amount that Medicare will reimburse for therapy barely failed on Tuesday, falling just two votes short. Had the amendment passed, it would have altered the overall bill, which would have been sent back to the House for consideration.

However, the bill as passed does do away with mandated review of therapy claims above a $3,700 threshold, making those reviews more targeted.

“The disastrous implementation of this [review] policy practically stopped the payment of claims and threated care for beneficiaries and payment for therapy providers,” Cynthia Morton, executive vice president of the National Association for the Support of Long-Term Care (NASL), told SHN. “It has taken sustained advocacy to get our message across that there is a better way to do this, and that is to target review so claims that are appropriate for review do get the review.”


NASL, which represents providers offering therapy and other services in long-term care settings and homes, continues to back a repeal of the therapy caps, Morton added. There will be another opportunity for repeal later this year, she believes.

Repeal of the caps also will be an ongoing priority for LeadingAge, said Cheryl Phillips, M.D., senior vice president for advocacy, in a written statement. The association represents many continuing care retirement communities and other non-profit senior care providers.

No more ‘doc fixes’

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Morton, Phillips, and other leaders representing skilled nursing, senior services, home health and other providers cheered Congress for passing MACRA and finally getting rid of the Sustainable Growth Rate (SGR) formula for setting physician pay rates.

The SGR tied doctor payments to the gross domestic product and overall Medicare expenditures; under the policy, physicians routinely faced payment cuts. To prevent these, Congress enacted temporary “patches” or “doc fixes” 17 times over the past 12 years.

To offset the cost of these patches, reimbursements to skilled nursing facilities and other provider types were sometimes reduced.

Under MACRA, skilled nursing facilities and other providers, including home health agencies, will see reimbursement increases limited to 1% in fiscal year 2018.

This is an acceptable price to pay for the stability offered by permanent SGR repeal, said Mark Parkinson, president and CEO of the American Health Care Association/National Center for Assisted Living, the nation’s largest long-term care provider association.

“The Senate’s bipartisan effort to pass H.R. 2 is a proud moment for our country and will impact millions of patients, families and providers in a truly positive way,” Parkinson said in a written statement Tuesday. “This legislation is the first step in establishing long-term stability to the profession.”

Despite the limits on reimbursement and increased costs for some Medicare beneficiaries, Congress only determined how to offset $73 billion of the bill’s $214 billion cost over 10 years, according to Congressional Budget Office estimates cited by The Hill. This led some of the more conservative members of the Senate to oppose the measure, but MACRA ultimately passed with just hours to spare before the latest reduction in doctor pay—of 21%—would have taken effect.

The repeal stems from bipartisan negotiations between House Democratic Leader Nancy Pelosi (D-Calif.) and Speaker of the House John Boehner (R-Ohio). It is the first significant entitlement reform in two decades, Boehner has said.

Written by Tim Mullaney

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