SNF Reimbursement Changes

By Jennifer A. Stiller
December 17, 2009

The House bill contains a number of changes to the way skilled nursing facilities (SNFs) are reimbursed by Medicare, most of which do not appear in the Senate bill.

If you aren't involved in operating a skilled nursing facility, give this post a miss. It's pretty technical.

Market basket updates

• Under the House bill, there will be no market basket update for FY 2010, starting January 1, 2010. There is no comparable provision in the Senate bill.
  
  
• Beginning with FY 2011 in the House bill and FY 2012 in the Senate bill, SNF market basket updates will be reduced by "a productivity offset in the form of a reduction in such increase or change equal to the percentage change in the 10-year moving average of annual economy-wide private nonfarm business multi-factor productivity." The Senate bill explicitly states that the effect of this adjustment may result in the market basket index update being less than zero for a fiscal year, and thus "may result in payment rates under this subsection for a fiscal year being less than such payment rates for the preceding fiscal year."

RUG case-mix recalibration adjustment
The House bill would put into place the RUG case-mix recalibration adjustment as proposed in the August 11, 2009 final rule for Medicare SNFs (74 Fed. Reg. 40287 et seq.)., effective for FY 2010 and thereafter. There is no comparable provision in the Senate bill.

New case-mix classification system
The House bill would require the Secretary to develop a new case-mix classification system for SNFs (targeted to go into effect for services provided during FY 2011). The new system would be driven by an analysis of factors affecting the cost of non-therapy ancillary services and would be budget-neutral. Prior to implementation of the new classification system, and starting with services provided on April 1, 2010, payment for the non-therapy ancillary services component will be increased by 10% and payment for the therapy case mix component will be decreased by 5.5%. (There is no comparable Senate provision.)

Outlier adjustments
The House bill would reduce overall payments to SNFs by 2% on October 1, 2010, in order to allow for new outlier adjustments "with respect to non-therapy ancillary services." In addition, new outlier adjustments "with respect to therapy services" may be implemented if the Secretary chooses to do so. No comparable Senate provision.

Part D billing requirement for pharmacies affiliated with long-term care facilities
The House bill, but not the Senate bill, would repeal a provision in Medicare Part D otherwise scheduled to go into effect January 1, 2010. The relevant provision, if not repealed, requires pharmacies located in or contracting with long-term care facilities to bill the relevant prescription benefit plan within 90 days in order to get paid.

Separate billing for clinical social worker services
The House bill, but not the Senate bill, would add clinical social worker services to the list of practitioner services excluded from the SNF prospective payment system and consolidated payment.