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AHCA's Parkinson: Medicare cuts will push SNFs to 'tipping point'

August 4, 2011
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Any automatic 2 percent cut to Medicare as a result of congressional debt negotiations will “disproportionately impact elderly residents and the providers who care for them,” the American Health Care Association said in a statement Thursday.

President Obama signed a bill Tuesday raising the federal debt ceiling, narrowly averting a government default. As part of the bill, a 12-member bipartisan congressional committee must identify $1.5 trillion in deficit reduction over the next 10 years. Congress must vote on the committee’s recommendations by December 23 or trigger automatic across-the-board spending cuts of $1.2 trillion, which would also cut Medicare but not exceed 2 percent of the program’s annual cost.

Medicaid and Social Security are exempt from any automatic triggered cuts.

“There comes a point in any sector when additional cuts can no longer be shifted, absorbed, or passed through to others. For our profession, that tipping point is right now,” said Mark Parkinson, president & CEO of the American Health Care Association/National Center for Assisted Living (AHCA/NCAL).

AHCA pointed out that the decision to leave Medicare open to an automatic cut could not come at a worse time. Skilled nursing facilities were handed last Friday an 11.1 percent payment reduction through the Centers for Medicare & Medicaid Services final rule on the SNF prospective payment system for 2012.

“An additional two percent cut could mean as much as a $50,000 reduction in funds available to care for patients at the average nursing home. For a typical 100-bed facility where 70 percent of its costs are staff-related, that could result in the termination of two direct-care workers,” AHCA said in the statement, citing data from the 2011-2012 Nursing Home Salary and Benefits Report compiled by the Hospital & Healthcare Compensation Service.

“These cuts don’t occur in a vacuum,” Parkinson said. “We hope Congress and the administration understand this latest proposal comes on the heels of several other deep reductions in provider funding—cuts that have taken their toll on our sector.”

Read more

Providers estimate lost revenues in response to FY2012 SNF payment cut

Hubert’s Test: Our commitment to elderly, disabled

LeadingAge’s summary of the 2012 SNF PPS final rule (PDF format)

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