Medicare SNF PPS Rule Comments Submitted

VHCA (7/2/2009)

On June 30th, the American Health Care Association (AHCA) submitted detailed comments and analysis to the Centers for Medicare & Medicaid Services (CMS) regarding the agency’s Skilled Nursing Facility Prospective Payment System (SNF PPS) proposed rule for FY 2010 and FY 2011.

AHCA has divided its comments and recommendations to address those changes that would impact providers in FY 2010 and FY 2011, respectively. Of paramount concern for FY 2010 is CMS’ proposal to substantially cut SNF Medicare reimbursements by recalibrating the parity adjustment, which would effectively siphon $1.05 billion from skilled nursing care in the upcoming fiscal year. The Office of Management & Budget (OMB) estimates that such an adjustment would eliminate $18 billion from quality skilled nursing care over the next 10 years.

AHCA takes issue with CMS’ effort to take back more than $1 billion in Medicare payments, which the agency believes would be tempered by the FY 2010 market basket update, resulting in a net loss of $390 million in Medicare Part A funding for skilled nursing care.  AHCA’s comments note that CMS fundamentally misunderstands the issue CMS has termed a “projection error.”  CMS believes that it made an error in estimating budget neutrality for case-mix adjustments in 2005 to its Resource Utilization Group (RUG) system.  AHCA disagrees with CMS and believes that the real case-mix change that has occurred since RUG refinement does not represent a “projection error,” but rather a reflection of the higher acuity patients being cared for in skilled nursing facilities nationwide.
 
With respect to FY 2011 proposed changes, AHCA cautions against premature implementation of RUG-IV, arguing that CMS should delay RUG refinement for two years. The two-year delay would allow the agency to undertake an independent national time study, using the revised MDS 3.0 resident assessment instrument that is scheduled to take effect on October 1, 2010. Delaying RUG-IV also would allow CMS to collect and analyze data from MDS 3.0 that would provide critical information to ensure that the transition to RUG-IV is both budget neutral and helps to get the RUG-IV system right from the start.  Additional AHCA comments to CMS focus on technical aspects of the proposed rule that deal with downward adjustment in resident therapy minutes for concurrent therapy and adjustments to the nursing and therapy weight components to achieve budget neutrality.

President Bruce Yarwood summarized AHCA’s FY 2010 principle recommendation stating, “CMS’ recommended $1.05 billion cut represents a reversal of the intelligent and sound Medicare policies that have led to SNFs’ ability to care for increased numbers of high-acuity patients.  Not only does this proposed rule undermine providers’ ongoing efforts to invest in and build the necessary clinical infrastructure for that quality care, but these cuts certainly would have the unintended effect of derailing our long-standing, shared goals of increased efficiency and effectiveness that benefit nursing home patients, caregivers, and taxpayers alike, as well as unintended negative effects for state and local economies.”

“As we work to support health care reform, and reasonable changes to the current SNF PPS,” concluded Yarwood, “we ask CMS to exercise care in executing its responsibility for the well-being of Medicare and Medicaid beneficiaries and those who care for them.”

CMS is expected to review all comments submitted during the public comment period and issue its final rule on or around August 1, 2009. AHCA’s detailed comments can be found at http://www.ahcancal.org/advocacy/Letters/CommentsFY2010SNFPPS.pdf.