CMS INCREASES MEDICARE PAYMENTS FOR BENEFICIARIES USING SKILLED NURSING FACILITY CARE FOR 2008

ACCURATE PAYMENTS CONTINUE TO ENSURE PROGRAM EFFICIENCY, QUALITY AND SUSTAINABILITY

Under new Medicare payment rates issued today by the Centers for Medicare & Medicaid Services (CMS), Medicare payments for beneficiaries using skilled nursing facility care will increase by approximately $690 million in fiscal 2008.

The 3.3 percent increase will be reflected in Medicare payment rates to skilled nursing facilities and hospitals that furnish certain skilled nursing and rehabilitation care to Medicare beneficiaries recovering from serious health problems. The final rule for the skilled nursing facility (SNF) prospective payment system (PPS) was placed on display at the Federal Register today.

"These new payment rates reflect our commitment to improving the quality of care in the long-term care setting while maintaining predictability and stability in payments for the providers who deliver those important services," CMS Acting Administrator Herb Kuhn said. "They will enable nursing homes and Medicare to continue to move forward in providing quality services for patients who need post-acute care. The SNF rule demonstrates our commitment to ensure that Medicare is affordable for current beneficiaries and is sustained for future generations by paying accurately and efficiently."

Under Medicare's SNF PPS, each skilled nursing facility is paid a daily rate based on the relative needs of individual Medicare patients, adjusted for local labor costs. The daily rate covers the costs of furnishing all covered skilled nursing facility services, including routine services such as room, board, nursing services, and some medical supplies together with related costs such as therapies, drugs and lab services; and capital costs including land, buildings and equipment. CMS uses a skilled nursing facility market basket to measure changes in the prices of an appropriate mix of goods and services included in covered skilled nursing facility stays. The price of items in the market basket is measured each year, and Medicare payments are adjusted accordingly.

The final rule revises and rebases the SNF market basket, which currently reflects data from fiscal year 1997, to reflect data from fiscal year 2004. The new payment rates also continue to include a special adjustment made to cover the additional services required by nursing home residents with HIV/AIDs.

"We are confident that the new payment rates will continue to ensure beneficiary access to the important services skilled nursing facilities provide," Mr. Kuhn said.

A full copy of the SNF PPS final rule for FY 2008 is available on the CMS website at http://www.cms.hhs.gov/snfpps/. It is expected to be published in the Federal Register on Friday, August 3, 2007.