HHS to Extend $1 Billion in Medicare Payments to Nursing Homes

4/23/2002

From: CMS Press Office, 202-690-6145

WASHINGTON, April 23 -- HHS Secretary Tommy G. Thompson today announced that the Centers for Medicare & Medicaid Services (CMS) will leave in place the current classification system that establishes daily payment rates to nursing homes based on the needs of Medicare beneficiaries, which will result in nursing homes continuing to receive an estimated $1 billion in temporary add-on payments next year.

After careful review of the available data and research, CMS determined that while the research shows promise for developing improvements to the skilled nursing facility prospective payment system, the research is not sufficiently advanced at the present time to implement refinements this year.

Congress has encouraged CMS to make the case-mix refinements, as the classification changes are known, in an effort to more fairly and accurately reimburse nursing homes for taking care of medically complex patients. The case mix refinements are intended to ensure that Medicare pays appropriately for patients that require more complex care.

If CMS proposed and implemented the case-mix refinements this year, a temporary payment increase included in the Balanced Budget Refinement Act of 1999 would expire as required by Congress. Instead, nursing homes will continue to receive those add-on payments.

As required by Congress, two other temporary add-on payments to nursing homes totaling about $1.4 billion are due to expire Oct. 1, 2002, at the start of fiscal year 2003. Today's decision does not affect those changes, but by continuing the other $1 billion in add-on payments, it will significantly improve the financial outlook for nursing homes.

CMS will publish a Federal Register notice before July 31, 2002, that will include Medicare's payment rates for fiscal year 2003.

"We are committed to providing reliable, quality care in our nation's nursing homes," Secretary Thompson said. "We are working with Congress and nursing homes to make sure that Medicare payments for nursing home care are appropriate for the levels of care needed for every resident."

Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.