CMS Proposes SNF Increase For 2008

VHCA (5/4/2007)

Medicare payments to nursing facilities would increase by approximately $690 million in FY 2008 under new rates proposed on Monday by the Centers for Medicare and Medicaid Services (CMS).  The proposed 3.3 percent increase would affect payment rates to nursing facilities that furnish certain skilled nursing and rehabilitation care to Medicare beneficiaries and is estimated to be nearly $10 per patient per day on average.

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.

It is important to note that the proposed rule includes multiple changes to the way that the market basket was calculated for FY 2008 and how it will be determined in future years.  AHCA has completed an initial analysis of the proposed rule and developed a summary for members.  To view the document, go to the AHCA website (member login required.)  If you need assistance please contact VHCA.

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.

The new payment rates also continue to include a special adjustment made to cover the additional services required by nursing facility residents with HIV/AIDS.

A full copy of the SNF PPS proposed rule for FY 2008 is available on the CMS website.  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.