FY 2009 SNF Medicare Final Payment Rule Released - Administration Rescinds $770 Million Cut!

VHCA (8/1/2008)

Late yesterday, the Centers for Medicare & Medicaid Services (CMS) released its Skilled Nursing Facilities (SNFs) Prospective Payment System (PPS) Final Rule for Fiscal Year 2009.  As requested by AHCA, CMS pulled back its originally proposed 3.3% reduction in SNF payment rates. This reversal in Administration policy ensures that SNFs will not lose the estimated $770 million in Medicare funding that CMS proposed with its so-called "forecast error adjustment" in May. The final payment rule also includes a market basket increase of 3.4% for next year - estimated to equal $780 million in increase payments for SNF Medicare services. The net fiscal impact of the rule is estimated to equal a payment increase of approximately $11 per patient per day.

As was the case in the proposed rule, the final rule does not address case-mix index changes resulting from the Staff Time and Resource Intensity Verification (STRIVE) Project. The new payment rates will take effect on October 1, 2008.

This significant decision to rescind the forecast error adjustment comes after two months of intense work and effort from AHCA and its members. Through extensive research, grassroots, lobbying, and public relations efforts, significant support was built in Congress that convinced the Department of Health and Human Services (HHS) and CMS to re-think the proposed cut. Congressional champions Senate Majority Leader Mitch McConnell (R-KY), Senate Majority Whip Jon Kyl (R-AZ) as well as Senators Kent Conrad (D-ND), Jay Rockefeller (D-WV) and Norm Coleman (R-MN) and Representatives Shelley Berkley (D-NV), Earl Pomeroy (D-ND), and Shelley Moore Capito (R-WV) - rallied the support of nearly half of the U.S. Senate and over 110 Members of the House of Representatives, urging CMS to "stop the cut" —and the Administration listened. This exceptional coordinated effort demonstrates how together, we can affect considerable change in our nation's capital. We join AHCA in thanking all of the members of congress who joined in and assisted us and the beneficiaries we represent. AHCA also appreciates the Administration's decision to rescind the forecast error portion in the final rule.