The American Health Care Association (AHCA), a lead provider
advocacy group, and the Medicare Payment Advisory Commission (MedPAC) released
separate statements over the Centers for Medicare & Medicaid Services’ (CMS’)
FY 2016 proposed rule to update Medicare payments to skilled nursing facilities.
Titled “Medicare Program; Prospective Payment System and
Consolidated Billing for Skilled Nursing Facilities for FY2016,” the rule would
increase Medicare’s payment rates for skilled nursing facilities (SNFs) by 1.4
percent. Medicare’s payments to the SNF sector are estimated next year to
increase $500 million, according to the agency. CMS is required by law to
update the SNF prospective payment system (PPS) rates.
In a recent letter addressed to Acting CMS Administrator
Andy Slavitt, MedPAC wrote that “no update is warranted,” stating that
“Medicare’s current level of payments appears more than adequate to accommodate
cost growth, even before any update.” The letter also expressed the commission’s
frustration over the agency’s failure to revise the PPS design—a system that
appears flawed, according to MedPAC.
“CMS should proceed with the much-needed rebasing of the
payment system signaled by the sector’s extremely high Medicare profit
margins,” the letter said.
AHCA issued a press statement saying that the proposed
update is needed for continuing quality care.
“MedPAC’s comments surrounding the CMS rule miss the bigger
picture. The commission’s own research shows that skilled nursing care centers
operate at an already thin overall margin of 1.9 percent,” said AHCA President
and Chief Executive Officer Mark Parkinson. “The proposed CMS update is
necessary so that skilled nursing facilities can continue to provide quality
care to our nation’s older Americans.”
Parkinson also claimed that another financial hit to the
industry would not be prudent at this time.
“While a permanent
fix on the sustainable growth rate promises stability to the sector, the
new [doc fix] law still draws billions from post-acute providers. Couple that
with other threats to the Medicaid program, and it’s clear now is not the time
to forfeit these needed updates,” he said.
The two groups agree that Medicare payment system reforms
are needed. AHCA supports the use of a value-based purchasing program for SNFs,
which it believes “provides cost savings, ensures quality care, and is fair to