In Advance of Sequestration Transparency Act Report, AQNHC Warns U.S. Nursing Home Sector Faces $65 Billion in Cumulative Medicare Funding Reductions Over Next 10 Years

Sequester Provision of Budget Control Act Alone Will Result in $9 Billion Cut Over 10 Years

Sep 06, 2012, 13:41 ET from Alliance for Quality Nursing Home Care

WASHINGTON, Sept. 6, 2012 /PRNewswire/ -- With specific details as to how the sequestration provision of the Budget Control Act will impact federal programs due later this week as required by the Sequestration Transparency Act, the Alliance for Quality Nursing Home Care (AQNHC) warned in advance that the U.S. nursing home sector and patients under their care face $65 billion in cumulative Medicare funding reductions over ten years as a result of several different budgetary actions and regulatory changes made since 2009 -- $9 billion of which will come just from the sequestration provision of the Budget Control Act, according to the independent health policy advisory firm, Avalere Health.

"We do not need to wait for the official details of how the sequester will impact U.S. seniors to know that America's skilled nursing facilities (SNFs) and the patients under their care will be forced to absorb $9 billion in Medicare cuts over ten years just from the sequester as we ring in the New Year less than four months from now," warned Alan G. Rosenbloom, President of AQNHC. "With nearly 70 percent of facility expenses related to staffing, the impact of the sequester combined with Medicaid reductions in a variety of states causes significant problems hiring and retaining the direct care staff that help make a key difference in care quality and patient outcomes."

Rosenbloom also pointed out that under the so-called 'bad debt' provision of the Middle Class Tax Relief Act of 2012, new SNF Medicare cuts of $3 billion over ten years go into effect on October 1, 2012 – just over three weeks from today. Despite the recent announcement by the Centers for Medicare and Medicaid Services (CMS) of a 1.8% payment update for U.S. SNFs, Rosenbloom pointed out the Medicare cuts associated with the new law combined with the sequester cut slated for 1/1/13 will, effectively, wipe out the update.

The cumulative $65 billion ten year reduction in SNF Medicare payments consists of the following budget cuts and regulatory changes: Productivity Adjustment (ACA-mandated): $34 Billion; Forecast Error (Case-Mix) Adjustment: $16 Billion; Forecast Error (Market Basket) Adjustment in FY 2011 Rule: $3 Billion; Bad Debt (Middle Class Tax Relief & Job Creation Act of 2012): $3 Billion; Sequestration: $9 Billion (Source: Avalere Health)

In August, the Alliance initiated a local facility tour program for U.S. Senate and House candidates "so candidates for public office can see first-hand how the high-value, high quality care provided in SNFs can – if adequately funded -- help reign-in health costs, improve coordination among providers, and ultimately bring about more accountability for U.S. taxpayers," Rosenbloom said. "We will continue these facility tours through the year and welcome a discussion as to how and why SNFs are part of the solution to successfully caring for an older, higher acuity patient population throughout America."

Contact Rebecca Reid 410/212-3843


SOURCE Alliance for Quality Nursing Home Care