The Center for Medicare and Medicaid Services (CMS) has announced that it is reducing payments for skilled nursing facilities by $3.87 billion in fiscal year 2012 (beginning October 1).
The cut represents an 11.1 percent cut in payments, nearly meeting the 11.3 percent cut CMS proposed back in April. The department said the cut would help adjust for unexpected increases in nursing-home payments this fiscal year. Another option would have increased funding by 1.5 percent.
Several senior living communities have indicated the impact the reduced payments will have on their operations. Brookdale Senior Living, for example, expects to see a full year reduction in cash from facility operations in the range of $20 million to $25 million. Sunrise Senior Living estimates that reported first quarter 2011 consolidated net income and adjusted EBITDA would have each been reduced by approximately $1 million had the reduced payments already been in place.
CMS also decided to increase payments to hospices by 2.5 percent while requiring the facilities to report on the quality of care received by Medicare patients.
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