The Medicare skilled nursing facility (SNF) payment rate for fiscal year (FY) 2011 will increase 1.7 percent and will result in an estimated $542 million increase in payments to nursing facilities nationwide. CMS annually updates the payment rates based on a market basket index that reflects changes in the price of goods and services used to furnish covered care in nursing homes. CMS also makes a forecast error adjustment whenever there is a difference between the forecasted and actual change in the market basket that exceeds a 0.5 percentage point threshold for the most recently available fiscal year for which there is final data.
Calculation method
The most recently available final fiscal year data is from FY 2009. For that period the estimated increase in the market basket index was 3.4 percentage points compared to an actual 2.8 percentage point increase. The actual increase was a 0.6 percentage point lower than the estimated increase. Based on the difference between the estimated and actual amount of change that exceeds the 0.5 percentage point threshold, the payment rates for FY 2011 now includes a negative 0.6 percentage point forecast error adjustment. Combined with the FY 2011 market basket increase factor of 2.3 percent, it yields a net update of positive 1.7 percent for FY 2011.
CMS also plans to delay the implementation of Patient Protection and Affordable Care Act (PPACA) ((P.L. 111-148), Section 10325, which modifies the FY 2011 implementation schedule for the Resource Utilization Group (RUG) version 4.0. This delay is being implemented until system modifications can be completed. The SNF Proposed rule will be published in the Federal Register on July 22, 2010. All comments regarding the Proposed rule must be received by September 14, 2010.
CMS Press Release, July 16, 2010.For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.
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