Medicare/Medicaid Payments for Institutional Facilities

May, 9, 2008

CMS published an interim final rule on May 6 on '09 payments for Long Term Care Hospitals.  The rule would increase rates by 2.7 percent, a $110 million increase in Medicare payments to 400 LTCHs that will receive $4.47 billion from Medicare in '09. The Medicare rates are also the upper payment limits for Medicaid payments. CMS will accept public comments on the interim final rule until July 7. CMS also published a notice on May 6 on the '09 payment rates for inpatient psychiatric facilities but is offering no opportunity for public comments on that notice because there are no changes in rate methods or policy in the IPF rate update.  

CMS published a proposed rule on May 7 on '09 payments for skilled nursing facilities. CMS is proposing to recalibrate the case-mix weights used under its Resource Utilization Groups (RUG) payment system. This would result in a 3.3 percent or $770 million reduction in Medicare payments, more than offsetting a scheduled 3.1 percent inflation update for these facilities. The net reduction in Medicare as compared with '08 is $60 million. The Medicare rates are the upper payment limits for Medicaid, which covers a much greater proportion of patient days in nursing facilities than Medicare. Public comments on this proposed rule will be accepted until June 30.

PCG will work with state Medicaid agencies and providers to analyze the rules and to help develop comments.

Tom Entrikin

Tom Entrikin is a PCG manager and former Medicaid policy specialist with the U.S. Health Care Financing Administration (HCFA), now the Centers for Medicare & Medicaid Services (CMS).