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 Congressional Budget Deal Funds Government, Repeals Therapy Caps, But Cuts SNF Funding

President Trump on Friday signed a two-year budget deal that includes a 10-year, $2 billion cut to skilled nursing facility (SNF) Medicare reimbursement. The massive $300 billion spending package, which received bipartisan approval in the Senate and House after a brief government shutdown early Friday morning, also permanently repeals therapy caps, long a priority of the long term and post-acute care profession (LT/PAC).

Another positive for LT/PAC providers is that the law eliminates the Independent Payment Advisory Board, an Affordable Care Act creation that would have posed a threat to future funding streams because its purpose was to reduce Medicare rates. 

On the package’s Medicare reimbursement cuts, Mark Parkinson, president and chief executive officer of the American Health Care Association/National Center for Assisted Living (AHCA/NCAL), said the work of providers to care for the nation’s frail and elderly will be further threatened.

“An across-the-board cut like the one included in this bill would have a dramatic effect on our nation’s most vulnerable citizens. The low Medicaid reimbursement in many states does not cover the cost of care, and providers struggle to keep their doors open,” he said in a statement released ahead of the final votes in Congress.

Legislative sources said the Medicare cut is akin to the ones included in the Medicare Access and CHIP Reauthorization Act in 2015. Instead of providers receiving their regular annual Medicare market basket update from the Centers for Medicare & Medicaid Services (CMS) in 2019, the new spending package freezes it at 2.4 percent.

In dollar terms, the Congressional Budget Office (CBO) said that would amount to a $1.9 billion cut over the 10-year budget window.

For LT/PAC providers this means that starting Oct. 1, Medicare payments will go up 2.4 percent under terms of the spending package just signed into law. CBO had projected that if left unchecked by the spending deal, the Medicare payment adjustment would have been a 2.7 percent increase.

While the 2.4 percent increase is set by the new law, providers won’t know if the 2.7 percent CBO estimated rate increase was accurate until May 1, the date by which CMS releases proposed rules on Medicare reimbursement.

The major positive from the legislative drama is that the law includes the permanent repeal of the therapy caps. Without repeal, AHCA/NCAL estimated that SNF Part B therapy revenue would have declined more than $811 million per year (37 percent of total Part B payments).

Dan Ciolek, AHCA/NCAL’s associate vice president of therapy advocacy, says, “While the 20-year odyssey to get these harmful caps repealed once and for all has been frustrating for everyone, the most important thing is that our residents are now assured that they can receive necessary and uninterrupted physical, occupational, and speech-language therapy services to improve or maintain their function and quality of life.”

Also, the limited targeted post-pay medical review program was immediately restored by the spending package, and a 15 percent reimbursement reduction for Part B therapy administered by therapy assistants (starting in calendar year 2022) to help pay for part of the repeal is also now law.

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