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 the providers.”
Jackie Oberst is Provider’s managing editor. Email her at or follow her on Twitter, @ProviderMag.