CMS Announces Skilled Nursing Facilities Rate Increase

The Centers for Medicare and Medicaid Services (formerly HCFA) announced last Thursday a 10.3% increase in Medicare payments to skilled nursing facilities beginning Oct. 1, the Philadelphia Inquirer reports. According to the Inquirer, the new rates are the result of legislation passed by Congress over the past two years to reduce "higher-than-anticipated" Medicare cuts that resulted from the 1997 Balanced Budget Act. Under the new rates published as a final rule, facilities could be paid up to $550 per day to care for Medicare beneficiaries who require the "highest level of care." HHS Secretary Tommy Thompson said, "These increases in payments to the nation's skilled nursing facilities will allow them to continue to provide quality care for critically ill elderly and disabled Medicare beneficiaries." But industry officials said that the rates "did not represent a major change." Alan DeFend, spokesperson for the American Health Care Association, a group that represents nursing homes and other long term care interests, said the rate increase is "really just a minor adjustment for inflation," adding, "This restores, to some extent, the funding that was removed in the late '90s from the Medicare program." Medicare accounts for 8.7% of nursing home revenue, and Medicaid pays for 67.7% of nursing home care. Private insurance, facility residents and residents' families account for the remainder (Goldstein, Philadelphia Inquirer, 7/28).