CEOs Upbeat About New CMS Skilled Nursing Payment Rules

Industry experts are still sorting out the long-term effects of the Centers for Medicare & Medicaid Services’ (CMS) new payment system for skilled nursing facilities, but early reviews from the CEOs of some top providers have been positive.

“I would say the rule that was just published is a positive for the industry,” Genesis Healthcare (NYSE: GEN) CEO George Hager told Skilled Nursing News in a phone conversation this week.

CMS last Friday rolled out its Patient-Driven Payment Model (PDPM), which the agency touted as a less paperwork-intensive overhaul of its previously announced Resident Classification System, Version I (RCS-I)  model. Both plans advance the goal of shifting reimbursement incentives away from volume and toward patient outcomes, but CMS contends that PDPM will achieve those aims with less confusion and bureaucratic headaches for providers.


While Hager cautioned that “the devil is always in the details,” he characterized the model as a streamlined system that will help providers save money in the long run.

“The real positive here is that this system will allow us to much better manage some significant cost elements in our business, the cost of providing rehabilitation therapy, [and] some of the administrative burdens in the existing system,” Hager said. “And, lastly, I think it significantly dilutes or reduces any kind of regulatory risk that exists today.”

In a prepared statement announcing his company’s first-quarter earnings results, Ensign Group (Nasdaq: ENSG) CEO Christopher Christensen thanked CMS for listening to industry concerns when developing the PDPM plan.


“While there is much to learn about this new proposed payment system, we are very pleased that CMS is working so closely with operators across the country to develop a predictable and sustainable reimbursement system,” Christensen said.

Speaking off the cuff on Ensign’s first-quarter earnings call Thursday morning, Christensen further characterized the deal as “good for taxpayers, and also good for the patient, and something that the good operators will be able to continue to be self-sustaining on.”

The Ensign chief warned against making definitive conclusions, calling the PDPM plan released last week “the first pass” out of multiple potential future revisions. But the proposal will help skilled nursing staff focus more on providing necessary care and less on tracking minutes, a net positive for residents, Christensen said.

In addition, both Christensen and Hager lauded the concurrent decision by CMS to boost the Medicare market basket rate to 2.4% for fiscal 2019, a higher figure than previously anticipated. CMS estimates that providers will see a total of $850 million more in Medicaid reimbursements as a result.

“The rule gave us a market basket increase that was significantly above what we realized this year, in fiscal 2018, so that was good news to see,” Hager said.

Written by Alex Spanko

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