Revenue and Spending
There has been a lot of noise, confusion, and disinformation from the industry about revenue and Medicare “cuts”. Skilled nursing experienced an increase in Medicare spending while spending overall for 32 million Medicare beneficiaries declined in 2020. Skilled nursing facilities manipulate and exploit PDPM reimbursement to maximize profits.
Kaiser Family Foundation confirmed SNF spending experienced a 4.4% bump, or $1.1 billion increase between 2019 and 2020 despite 200,000 fewer Medicare beneficiaries using SNF services in 2020. The number of beneficiaries using SNFs declined by one-third in the last decade. 1.3 million enrollees in 2020.
Patient Driven Payment Model
This all goes back to the horrible change to Patient Driven Payment Model (PDPM) which was intended to be budget neutral. However, it was determined that the model increased payments to nursing homes by about 5% in fiscal 2020. CMS found that aggregate spending under the new model increased by $1.7 billion when compared to what it would have paid SNFs under the old Resource Utilization Group model.
A windfall to the industry. MDS reports are vital for proper reimbursement for the treatment they allegedly provide, and the best care is being given to patients. If MDS assessments aren’t accurately completed, there can be regulatory concerns and delays in adequate care plans causing neglect.
Therefore, as expected, CMS announced plans to lower nursing home (PDPM) rates by 4.6% — a $1.7 billion decrease — to account for unintentional overpayments. They also received an annual increase of 2.3% even after all the bailout money.
CMS should require a minimum direct care spending requirement for nursing homes. Direct revenue to increase staffing to safe levels.
“We want to make sure that the dollars get to the direct care workforce to ensure high-quality care.”
-Dan Tsai, CMS deputy administrator and Medicaid director, told Kaiser Health Network.