On June 27, the American Health Care Association (AHCA) submitted their 134 pages of comments to the Centers for Medicare and Medicaid Services (CMS) on the CMS Fiscal Year 2012 Skilled Nursing Facility (SNF) PPS proposed rule. As a reminder, two months ago CMS released the 2012 SNF PPS proposed rule. The CMS proposal presented two options—one that was acceptable, and another that would be significantly detrimental to our profession with a combined impact of a $4.5 billion adjustment to Medicare rates and major changes to therapy.

In their comments, AHCA proposed a solution to the dilemma described in the proposed rule by CMS—the new RUGS IV has not been budget neutral to the system. AHCA’s comments reflect the understanding that the requirement that CMS’s parity adjustment must bring the SNF payment system to “budget neutrality” – that is, the total expenditures under the new system need to be roughly the same as those that would have been made under the old system. AHCA believes that CMS has overestimated the size of the overpayment and is convinced that there hasn’t been enough data collection yet to determine what that number should be.

In their comments, AHCA proposed a solution that assures budget neutrality from October 1, 2011, forward; presents the opportunity to calculate the correct figure for reduction; and prevents an unmanageable reduction in Medicare rates. Following is an outline of the AHCA solution.

• For FY 2012, CMS should reduce rates by 3.0 percent, plus the productivity adjusted market basket update.
• For FY 2013 and subsequent years, if necessary, CMS could further reduce rates up to 3.0 percent plus the productivity adjusted market basket update until budget neutrality is achieved.
• In determining budget neutrality, CMS should evaluate and include the impact of the various changes to the SNF PPS RUG system described in the FY 2012 proposed rule (such as changes to therapy). AHCA believes there could be savings totaling hundreds of millions of dollars from potential changes in group therapy, as well as potential savings from other changes in the proposed rule, and asks that they are credited against potential reductions.
• If this phase-in of the budget neutrality adjustment results in overpayments in FY 2012 and beyond CMS should prospectively recover these non-budget neutral overpayments.

You can read the AHCA comments in their entirety. AHCA will make a formal presentation to CMS on July 8th. CMS intends to issue a final rule by August 1.

Patti Cullen, CAE
952.851.2487
pcullen@careproviders.org

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