Late last week, the Centers for Medicare & Medicaid Services issued a number of proposed payment changes for Medicare providers in 2011.
These included:
Medicare Home Health Services
The proposed rule represents a 4.75 percent decrease in Medicare payments to home health agencies for calendar year 2011. This is an estimated net decrease of $900 million compared to payments HHAs received in CY 2010, and includes the combined effects of a market basket update, a wage index update, reductions to the home health prospective payment system (HH PPS) rates to account for increases in aggregate case-mix that are unrelated to underlying changes in patients’ health status, and other provisions mandated by the Affordable Care Act of 2010.
Wage index changes for the Medicare Hospice Benefit
Hospices serving Medicare beneficiaries will see an estimated 1.8 percent increase in their payments for fiscal year 2011. The estimated hospice payment increase is the net result of a 2.6 percent increase in the hospital market basket, an indicator of input price increases. This is an offset by an estimated 0.8 percent decrease in payments to hospices due to updated wage index data and the second year of CMS’ 7-year phase-out of its wage index budget neutrality adjustment factor.
Medicare Skilled Nursing Facilities
Nursing home payment rates for fiscal year 2011 will increase 1.7 percent. CMS says this increase will result in an estimated $542 million increase in Medicare payments to nursing homes across the country during FY 2011. For FY 2009, the estimated increase in the market basket index was 3.4 percentage points, while the actual increase was 2.8 percentage points. According to CMS, this resulted in the actual increase being 0.6 percentage point lower than the estimated increase.
As a result, the payment rates for FY 2011 include a negative 0.6 percentage point forecast error adjustment, because the difference between the estimated and actual amount of change exceeds the 0.5 percentage point threshold,. The adjustment, when combined with the FY 2011 market basket increase factor of 2.3 percent, yields a net update of positive 1.7 percent for FY 2011, CMS said.