CMS Proposes Increase in Medicare Payments to Nursing Homes for 2008
Medicare payments to nursing homes would increase by approximately $690 million in fiscal 2008 under new rates proposed today by the Centers for Medicare & Medicaid Services (CMS).
This 3.3 percent increase would affect payment rates to nursing facilities that furnish certain skilled nursing and rehabilitation care to Medicare beneficiaries recovering from serious health problems. The proposed rule for the skilled nursing facility prospective payment system (SNF PPS) was placed on display at the Federal Register today.
Under Medicare’s SNF PPS, each facility is paid a daily rate based on the relative needs of individual Medicare patients, adjusted for local labor costs. The daily rate covers the costs of furnishing all covered nursing facility services, including routine services such as room, board, nursing services, and some medical supplies together with related costs such as therapies, drugs and lab services; and capital costs including land, buildings and equipment.
“These new payment rates reflect our commitment to improving the quality of care in the long-term care setting while maintaining predictability and stability in payments for the nursing home industry,” said Leslie V. Norwalk, acting administrator of CMS. “This represents yet another step to enable nursing homes and the Medicare program to continue to move forward in providing quality services for patients who need post-acute care.”
CMS uses a skilled nursing facility “market basket” to measure changes in the prices of an appropriate mix of goods and services included in covered skilled nursing facility stays. The price of items in the market basket is measured each year, and Medicare payments are adjusted accordingly. The proposed rule includes a proposal to revise the market basket which currently reflects data from fiscal 1997 to data reflecting fiscal 2004.
The new payment rates also continue to include a special adjustment made to cover the additional services required by nursing home residents with HIV/AIDS.
A full copy of the SNF PPS proposed rule for FY 2008 is available on the CMS website at www.cms.hhs.gov/providers/snfpps. It is expected to be published in the Federal Register on May 4, 2007. Public comments on the proposal will be accepted until June 29, 2007.