As the Centers for Medicare & Medicaid Services unveils its proposed payment rules for the coming fiscal year, some in the industry feel that what has already been issued for inpatient rehabilitation facilities (IRFs), inpatient psychiatric facilities (IPFs) and hospice providers does not “bode well” for the skilled nursing industry.
A Mizuho Securities analyst note published on April 4 said that “while past trends may not perfectly be predictive of FY23,” the 2.7% rate increases for hospice and IPFs and the 2.8% rate increase for IRFs is not “a good read-across for SNF increases.”
Stifel also touched on the proposed rates in its analyst note on Monday, highlighting that “investors hoping to see a much higher Medicare increase in the proposed 2023 rate may be disappointed, at least initially.”
Mizuho indicated that CMS could issue the proposed rule as early as this week, whereas Stifel in its note on Monday said it was likely to be released next week.
Regardless of when exactly the skilled nursing proposed rule comes out, the topic remains top of mind for leaders in the space.
Just last week American Health Care Association President and CEO Mark Parkinson shared his concern over the likelihood of disastrous Medicare funding cuts.
This potential cut comes at a time when the industry is still recovering from the COVID-19 pandemic and an ongoing labor shortage.
According to the latest job figures from the Bureau of Labor Statistics, nursing and residential care facilities lost 4,000 jobs in March – with 2,500 jobs from nursing care facilities specifically.
“The tea leaves are indicating that we’ve got a real problem here. So we’re working as hard as we can to make the best possible case that nursing homes have never been in a worse position and this would not be a good time for a cut,” Parkinson told Skilled Nursing News during a virtual event hosted by the news organization.
Parkinson pointed to the federal government’s comments on possibly recalibrating the industry’s relatively new Patient-Driven Payment Model (PDPM) after determining the model increased payments to nursing homes by about 5% in fiscal 2020, for a total gain of $1.7 billion.
Last July, CMS boosted provider pay by 1.2% and delayed an adjustment to Patient-Driven Payment Model (PDPM) pay rate changes for at least one year. This was a decrease for fiscal 2022 compared to the agency’s proposed 1.3% boost in April.
The current situation reminded Parkinson of what happened in 2011, the last time the sector had a sizable change in its payment model following corrections to the former Resource Utilization Group (RUG) system.
“That first year we were overpaid by 12%, according to CMS,” he said. “And they completely cut it the next year.”
A 60-day comment period will follow the proposed payment rule announcement after which CMS will issue a final rule with new payments going into effect in October.
Companies featured in this article:
American Health Care Association, Centers for Medicare & Medicaid Services, CMS, Mizuho Securities USA, Stifel
