Healthcare Financial News

CMS on May 2 announced the final regulation establishing RY09 federal payment rates and policies for long-term care hospitals (LTCHs). The nearly 400 LTCHs across the nation are acute care hospitals that treat some of Medicare’s most severely ill or medically complex patients.

The agency issued a final payment rule for RY09 that increases the standard federal rate for LTCHs by 2.7 percent from the 2008 rate established by Congress in the Medicare, Medicaid, and SCHIP Extension Act of 2007. That increase establishes a standard federal rate for RY09 of $39,114.36 and is applicable to discharges during the 15-month period from July 1, 2008, through Sept. 30, 2009. Aggregate LTCH prospective payment system payments for RY09 are estimated at approximately $4.47 billion under the final rule--an increase of approximately $110 million over estimated payments in RY08. Read the press release.

The Centers for Medicare and Medicaid Services (CMS) on May 1 announced its proposal for new, more accurate FY09 payment rates for Medicare skilled nursing facilities (SNFs) that more closely reflect differences in patient care needs.

The agency is proposing to recalibrate the case-mix weights in order to reestablish budget neutrality on a prospective basis. CMS is also proposing to recalibrate the second part of the refinement package that accounted for the use of non-therapy ancillary services. The proposed FY09 recalibration of these adjustments to better reflect the resources used by beneficiaries would result in a reduction in payments to nursing homes of $770 million, or 3.3 percent. However, this decrease would be largely offset by this fiscal year’s proposed update to Medicare payments to SNFs. The update--a proposed market basket increase of 3.1 percent for FY09--would yield $710 million in increased payments to SNFs. Taken together with the proposed recalibration of the case mix index, SNFs could expect to see a slight decrease in payments of $60 million, or 0.3 percent. Public comments on the proposal will be accepted until June 30, 2008. Download the proposed rule.