The Medicare Payment Advisory Commission (MedPAC) unanimously voted Thursday to approve its recommendation for a 3% Medicare payment cut for skilled nursing providers in 2024.
This move follows the Commission’s draft recommendation discussed during a meeting on Dec. 9.
Despite the proposal for a rate cut, MedPAC commissioners have noted that the industry is facing a tough environment. The labor shortage has added to providers’ woes while SNFs have continued to struggle with high costs, commissioners argued.
And while MedPAC’s mandate is to focus only on Medicare policy, the commission is aware that Medicare reimbursements help to subsidize lower Medicaid rates.
“Medicaid does not pay a rate that’s commensurate with the cost of care,” said MedPAC Commissioner David Grabowski, at the commission’s meeting in December.
He also noted the important role that the Covid-19 public health emergency has played, in granting flexibilities to skilled nursing operators.
In the early days of the pandemic, operators benefited from direct financial support in the form of relief funds and other resources; more recently, Grabowski said, the “relaxation of the three-day rule and the ability of nursing homes to skill in place” has been critical.
Meanwhile, hospital referrals to nursing homes have suffered due to a bottleneck created partially by the ongoing labor crisis, and hospitals have called for more support for post-acute providers.
And Grabowski reflected on how the end of the PHE could further erode referral streams: “I’m really worried, once the public health emergency ends, we’re going to see kind of a bit of a reckoning there where we’re not seeing the discharges from the hospital to SNFs that were pre-pandemic.”
The American Hospital Association (AHA) has also called for “law updates” related to hospital-based SNFs and IRFs, arguing that severe cuts to Medicare are “harmful” to the entire care continuum, especially hospital-based SNFs and their host hospitals.
“[Post-acute care] providers have stretched beyond their usual capacity to support their acute-care counterparts and maximize care for their communities,” Ashley Thompson, AHA’s senior vice president of public policy analysis and development, said in early January, following MedPAC’s draft recommendation.
Companies featured in this article:
