Significant Cuts To Medicare Nursing Home Payments Set

Under a corrective proposal issued by the federal government last week, Medicare payments to nursing homes would be trimmed by 11.1% beginning October 1 according to Jesse Slome, executive director of the American Association for Long-Term Care Insurance.

Slome noted that the reduced funding was the result of a finding that revealed nursing home care providers have been paid more than $2 billion above federal projections since a new payment system took effect late last year.

‚ÄúNursing homes have become dependent on government payments from both Medicare and Medicaid,” Slome told a group of consumers on a call today. “These taxpayer-supported programs just can no longer foot the billions of dollars and we fully expect government coverage for many such programs will be especially cut for middle income and affluent individuals in the form of more cost-sharing or reduced benefits.”

The Centers for Medicare and Medicaid Services (CMS) Administrator Donald M. Berwick, M.D. said the adjustments are part of an effort to pay skilled care operators “properly” in the next fiscal year.

The recalibration will result in a reduction to skilled nursing facility payments of $4.47 billion or 12.6%, according to CMS. However, that drops to an 11.1% cut when offsetting increases are factored in, Slome explains. “Less money will ultimately result in poorer care and we’ll be facing a society where those with means will be able to pay for care and others will be forced to depend on whatever taxpayer-paid benefits are available at the time.”

“We have long said that aging baby boomers who fail to plan for the risk of needing long-term care will wake up to find out their options are seriously limited,” Slome added. “A failure to plan is simply a plan for failure.” The Association director reports that sales of long-term care insurance are increasing in 2011. “In spite of a difficult economy, more Americans realize they had better take some action while they can still health qualify for this protection.”

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