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Government Cuts Affect Nursing Homes

Nursing home residents may soon face higher costs and reduced services, as planned Medicare spending cuts take effect this fall.

The last few months have been a wild ride on multiple levels, to include concerns over Medicare and the “debt crisis.” While many more challenges lie ahead in terms of budget cuts, some cuts already have been made which have fallen under the proverbial radar screen. Several of the more important cuts that I would like to point out will go into effect this fall.  These are detailed in a recent SmartMoney article.

According to SmartMoney, nursing home residents could face higher costs or reduced care once these cuts kick in.

Background

On July 29, The Centers for Medicare and Medicaid Services (CMS) announced that they would be overcoming last year’s $4 billion shortfall in their budget by cutting reimbursement rates to nursing homes by 11.1%. In real terms, this cuts in the government’s reimbursement rate to nursing homes can only result in passing those costs on to the private payer resident beginning as soon as this fall. In may just as likely result in a reduction in services to

nursing home residents. Either way, the forecast is not pleasant.

Background

On July 29, The Centers for Medicare and Medicaid Services (CMS) announced that they would be overcoming last year’s $4 billion shortfall in their budget by cutting reimbursement rates to nursing homes by 11.1%. In real terms, this cuts in the government’s reimbursement rate to nursing homes can only result in passing those costs on to the private payer resident beginning as soon as this fall. In may just as likely result in a reduction in services to nursing home residents. Either way, the forecast is not pleasant.

There is the possibility that cuts will have no impact on nursing homes. After all, the CMS actually justifies the 11.1% cut by pointing out that it is simply a more accurate reimbursement amount based on a government report indicating that Medicare has been overpaying. In fact, a spokesperson for the CMS maintains, “We do not believe that nursing homes will respond to the payment changes by decreasing the quality of care furnished to patients. However, we intend to carefully monitor changes in utilization and staffing patterns to ensure that patients continue to receive high quality care.”

The nursing home industry appears to be monitoring the situation with caution. Bottom line: If you have a loved one in a nursing home, then you, too, should take notice.

Reference: SmartMoney (August 18, 2011) “Medicare Cuts Could Up Nursing Home Costs

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