CMS Announces Payment Increase for Skilled Nursing Facilities
On July 27, 2006, the Centers for Medicare and
Medicaid Services announced a 3.1% increase in
payments, totaling $560 million, to the skilled
nursing facility prospective payment system.
This increase reflects both a rise in the
"market basket" index of nursing home expenses,
as well as a temporary 128% increase in the per
diem rate for residents with HIV/AIDS, although
CMS estimates that fewer than 2,000 beneficiaries
will qualify for this added benefit.
While the 3.1% increase in payment totals reflects
the average increase across the nation, this
increase varies by geographic region. The smallest
and greatest increases both occur within the
Mountain geographic region, with an increase of
1.2% in the rural areas of the Mountain region,
and an increase of 4.2% in the urban areas of the
Mountain region. Payments in urban areas
across the country will increase by 3.2%, while
payments in rural areas will increase by
2.7%. Payment increases will not vary significantly
between homes by ownership type, with
government owned homes receiving a 3.2% increase,
and proprietary and voluntary homes receiving
a 3.1% increase. There will be no difference
in payment increases between hospitalbased
and freestanding units in urban areas, at
3.2% each, and a .1% difference between the
increases for hospital-based and freestanding
units in rural areas, at 2.8% and 2.7% respectively.
CMS's update notice also provides an overview
of several agency initiatives. The Post-Acute
Care Demonstration is aimed at streamlining payment
systems, including the possibility of applying
consistent payments for a given service regardless
of the site of service. The Nursing
Home Value-Based Purchasing Demonstration is
a partnership with state agencies that would reward
participating nursing homes with additional
payments upon review of certain quality measures.
The Post-Acute Care Demonstration is still
in the planning stages, but is to be established by
January 1, 2008 and run for three years under
the current statute established in section 5008 of
the 2005 Deficit Reduction Act. The Value-
Based Purchasing Demonstration also is in the
developmental stages. As of now, CMS is in the
process of inviting various state agencies to participate
in the future demonstration.
CMS also announced a plan to initiate a new
Nursing Home Quality Campaign through 2008,
which will build upon the Nursing Home Quality
Initiative. The Campaign's goal is to improve the
quality of life and efficiency of care delivered in
nursing homes. Current partners in this campaign
include AMDA as well as AHRQ, AAFP,
AAHSA, AHCA, AMA, and many others.
Last, CMS re-affirms its prior (April '06) proposed
rule (71 FR 23996) to implement a Health Care
Information Transparency Initiative through the
use of health information technology, and mentions
that the agency has solicited comments on
a number of different facets of this rule.
As CMS claims that these updates have been
made utilizing established procedures and methodologies
and does not initiate policy changes,
the agency has chosen to waive notice and comment
procedures. The prospective payment system
increases will take effect on October 1, 2006.
To view the notice, go to http://www.cms.hhs.gov/snfpps/downloads/cms-1530-n.pdf
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