MedPAC SNF Funding Guidance Compounds Sector Instability, Raises Threat to Seniors' Care

No SNF Cost of Living Adjustment, Additional 4% PPS Rebasing Cut Ignores Medicare-Medicaid Funding Link and $65.6 Billion Ten Year Cuts Facing U.S. SNF Sector

Mar 15, 2013, 14:27 ET from The Alliance for Quality Nursing Home Care

WASHINGTON, March 15, 2013 /PRNewswire/ -- Noting the nation's Skilled Nursing Facility (SNF) sector is already surviving on razor-thin overall operating margins, forced to absorb new $9 billion sequester-generated Medicare cuts, and facing $65.6 billion in cumulative Medicare funding reductions in the FY 2012-21 budget window, the Alliance for Quality Nursing Home Care (AQNHC) today expressed strong opposition to the Medicare Payment Advisory Commission's (MedPAC) recommendation that Congress provide no FY 2014 SNF cost of living adjustment. The Alliance also strongly opposes MedPAC's guidance to revise the SNF Prospective Payment System (PPS) for 2014, which will result in an additional cut of at least 4%.

"Considering the fact 40 states have cut or frozen state Medicaid SNF rates since 2009, today's MedPAC recommendation, as it does annually, fails to properly evaluate overall Medicare-Medicaid operating margins -- the lowest of any provider group," said Alan G. Rosenbloom, President of AQNHC. "With the sector and patients under our care absorbing more new Medicare cuts as a result of the sequester and recent passage of ATRA, the nation's second largest health facility employer now faces a staggering $65.6 billion in Medicare cuts over the next ten years, and this cannot be sustained – period."

MedPAC's proposed rebasing, which assumes a minimum 4% reduction in Medicare spending for SNF care, is "an untenable non-starter," Rosenbloom said. "When added to the deluge of Medicare and Medicaid cutbacks facing the SNF sector, the cumulative impact of rebasing in this manner would inevitably lead to substantial adverse consequences for key front line care jobs, patient care quality, and local economies -- especially throughout rural America."  

Despite AQNHC's strong opposition to the MedPAC recommendations, Rosenbloom did offer praise for the report's clear recognition that separate Post Acute Care (PAC) silos of payment serve neither patients nor taxpayers in an optimal manner. States MedPAC: "The separate PAC silos of payment—each setting is paid under a separate payment system, each of which has its own set of financial incentives—do not include any incentives to coordinate care across multiple providers or encourage safe transitions to the patient's home."

Concluded the Alliance leader: "SNFs are a key part of the solution to Medicare cost containment, and play a vital role in transitioning patients from hospitals to home, as well as providing long-term care services. Further destabilizing SNF sector economics with more Medicare cuts is counterproductive, illogical, and hurtful to our ability to continue providing high quality long term and post acute care to America's growing population of seniors. Systemic post-acute payment reforms can save Medicare resources and rationalize the system for the collective benefit of patient, provider and taxpayer alike. Now is the time for new policy ideas – not just more SNF Medicare cuts."

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SOURCE The Alliance for Quality Nursing Home Care