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Last Updated on:
05/02/08
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Proposed Medicare Nursing
Home Payment Rates
For Fiscal 2006
May 13, 2005
On May 13, 2005, CMS issued a news release on the
"Proposed
Nursing Home Payment Reforms Increase Accuracy, Predictability of Payment."
In addition, CMS also issued the proposed rule entitled "Medicare
Program; Prospective Payment System and Consolidated Billing for Skilled Nursing
Facilities for FY 2006." Click on the links above to view the
PDF
documents.
A short summary of the changes
in the proposed rule that affect the RUG rates is as follows:
-
Market basket update for
inflation of 3% (same as last year) with no adjustment for cumulative forecast
error correction.
-
Labor related portion of rate
is 76.087%
-
Budget Neutrality Factor is
1.0011 (same as last year)
-
Implement case-mix
refinements as of January 1, 2006. (This means the 6.7% and 20% add-on are
eliminated)
-
Nine new RUG categories as of
January 1, 2006 (RUX, RUL, RVX, RVL, RHX, RHL, RMX, RML, RLX). These new
categories are an attempt to account for the group of residents
using both rehab and extensive care services.
-
The nursing and therapy
components case-mix's are reweighted to incorporate the nine new RUG
categories.
-
CMS has changed the wage
index statistical group's used to calculate the RUG rates from MSA's
(Metropolitan Statistical Area's) to CBSA (Core-Based Statistical Area's).
This affects both the rural and urban indexes but it appears that the rural
group number is still based on the alphabetical order of the state name. The
Urban CBSA number is five numbers whereas the MSA was four.
According to the Federal
Reguster, CMS has tried to make the January 1, 2006 changes budget neutral, but
this still means that some SNFs will get hurt by the case-mix and wage index
changes and some will benefit. The table below summarizes the fiscal
impact of these changes:
| |
Gain |
Loss |
|
Estimated Add
on Loss for FY2006 |
|
$1.4B |
|
FY2006 Market
Basket Update |
$510M |
|
|
Add-ons
retained until January 1, 2006 |
$375M |
|
|
Nursing Case
Mix Adjustment |
$510M |
|
|
Total effect |
$1.4B |
$1.4B |
|
