Home » Blog Articles » Medicare & Medicaid » Post Acute Care Facilities Receive Pay Increase From Medicare

The Centers for Medicare & Medicaid Services (CMS) is moving forward on a planned increase in federal payments to skilled nursing facilities and inpatient rehabilitation facilities. CMS stated that these facilities will receive a $925 million dollar increase in federal funding for 2018. Medicare & Medicaid first proposed this payment increase back in April 2018. The CMS proposed a $1 billion raise next year as part of the annual prospective payment rules. They also proposed various policy and documentation changes for each post-acute care provider type in order to reduce the administrative burdens on them and their patients.

Under the new skilled-nursing facility payment rule, Medicare funding will rise by 2.4 percent for the 2019 fiscal year. This would equal roughly $820 million increase in Medicare payments. A new Patient-Driven Payment Model will also launch with this new rule. The goal of this new rule is to provide better reporting, less paperwork and reduced administrative costs. In order to determine the Medicare payment amount, the new model will focus on a patient’s condition and resulting care needs; rather than on the amount of care provided.

There is less reliance on the volume of services to set payment amounts. With the increases focus on value-added concepts, the new rule also modifies portions of the SNF Value-Based Purchasing Program. There is an adjustment to the program’s scoring methodology and an extraordinary circumstances exemption policy. These CMS payment changes for skilled-nursing facilities are scheduled to start October 1, 2018, and will evaluate the providers’ readmission rates and other care indicators.

The Centers for Medicare & Medicaid Services has added an inpatient rehabilitation facility payment rule which will increase net payments by 1.3 percent. For the fiscal year 2019, this is a dollar amount of $105 million. This rule will allow rehabilitation physicians to remotely lead interdisciplinary team meetings. The interdisciplinary healthcare provider meetings will not require any additional documentation, so they increase the efficiency of the overall healthcare system. The post-admission physician evaluation will count as one of the face-to-face doctor visits required in the first week of an inpatient rehabilitation facility (IRF) admission.

In previous years, (2015) Medicare spent $7.4 billion on fee-for-service IRF care provided in about 1,180 such facilities nationwide. That same year, about 15,000 SNFs furnished 2.4 million Medicare-covered stays to 1.7 million fee-for-service beneficiaries, according to the Medicare Payment Advisory Commission.

HHS Secretary Alex Azar stated that “a system that pays for value will aim to move patients into the lowest-cost appropriate setting. We are interested in ways that Medicare and Medicaid can better support the kind of coordination and integration needed for these transitions. This will likely involve stronger connections between the healthcare and human services sides of HHS. There may be potential for making more use of community aging and disability networks, which are supported by HHS’ Administration for Community Living.”

From a broader viewpoint, post-acute care is a growing and essential health and social service in the United States. Accounting for more $2.7 trillion spent on personal health care, while making up almost 15% of total Medicare spending; post-acute care is an important piece of the overall healthcare system.

As an experienced provider of revenue cycle management services, ABCS RCM will continue to follow the changes that occur in post-acute care documentation and payment rules. For additional questions or comments – please contact us.

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Medicare, Post-Acute Care, Payment Model, IRF, SNF