CHA News Article

MedPAC Calls for SNF Payment Reform

The Medicare Payment Advisory Commission (MedPAC), in conjunction with The Urban Institute, has released a report reviewing Medicare’s payments to skilled-nursing facilities (SNFs). The report, titled The Need to Reform Medicare’s Payments to Skilled Nursing Facilities Is As Strong As Ever, studied the relationship between SNF payments and costs over time to assess whether changes the Centers for Medicare & Medicaid Services has made to the payment system have improved payment accuracy. It concludes that current policies continue to poorly target payments for non-therapy ancillary (NTA) services, and that policies provide an advantage to facilities that predominantly admit patients with rehabilitation care needs.

The study also compared current policy to an alternative design that would base payments on patient characteristics and establish a separate payment component for NTA services. Based on this review, the study concludes that an alternative design would increase payment accuracy and notes that under the proposed alternative, almost all hospital-based facilities would see their Medicare revenues increase by more than 10 percent. The full report is attached.