The Current State of the Skilled Nursing Medicare System

The Current State of the Skilled Nursing Medicare System

It isn’t always easy to keep up with the movers and shakers of skilled nursing, but it is important to make an effort to do so. Just this week we learned that skilled nursing Medicare reimbursement will be cut by 8%, which is a big deal and something to pay attention to. Before we get into all that, let’s take a brief look at the measure in question and what we can expect.

Understanding the Medicare Post-Acute Care Value-Based Purchasing Act of 2015

Back in July 2015, a measure called the Medicare Post-Acute Care Value-Based Purchasing Act of 2015, which had numerous sections aimed at redefining the post-acute care system. Over the last year and a half, the bill has been under review. We have recently learned that the bill may soon come out of committee and be put to a vote. There are several talking points of the measure that may impact the may in which post-acute care providers treat Medicare patients. This would extend to home health agencies, skilled nursing facilities, inpatient rehab facilities, long-term care hospitals, and hospice agencies. As you can imagine, this is a big deal and could drastically change the landscape of skilled nursing in regards to Medicare patients.

We aren’t going to get into the logistics of the bill itself (you can find out more here) but one thing we would like to point out is that the policy places a lot of importance on the overall performance of a provider. This means that skilled nursing providers would be required to perform on the Medicare Spending per Beneficiary (MSPB) metric system while at the same time offering their support to other local operations to do the same.

What’s the Problem?

One of the main areas of concern with the measure is the notion of how bonus payments will be funded, which could be impacted by the new scoring system and regulations set in place by the bill. If the bill were to pass, in 2019 Medicare would begin reducing payments to post-acute providers by a whopping 3 percent in order to create a pool of funds to be drawn from for bonuses. According to the layout of things, the payment reduction would increase annually, reaching 8 percent by 2025. This is where things get complicated. Some providers will get back some of the reduction in kickbacks through bonuses, but it’s safe to say that some will not. The Secretary of Health and Human Services (HHS) would have the final say, which is raised questions for some within the skilled nursing industry.

The big problem here is that, given that fact that skilled nursing facilitators are often faced with narrow margins as it is, this additional reduction could lead to added stress and complications.
We will keep you updated on the measure as we learn more and will be keeping a watchful eye on whether or not it goes to a vote, and what the outcome is. For more information on issues impacting the skilled nursing community, please do not hesitate to contact Shep Roylance of JCH Senior Housing Group.