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Hospice providers may soon face cuts

On Behalf of | Jun 27, 2023 | Health Law Attorneys

Skilled nursing has always been the hallmark of hospice care in Texas. This is an industry where quality of care has always been more important than mere profits. However, it is also true that there does need to be at least a nominal return on the hundreds of millions of dollars invested each year. This reality raises the specter of potential budget cuts.

Budget neutrality is the stated goal

Health care law has always been flexible when it comes to the issue of budget neutrality. This is an area where rules have been crafted in order to allow for its maximum availability. Recently, a federal advisory board found that the fiscal year 2020 for Medicare payments had ended on a 25% margin.

This slightly unexpected margin was the apparent cause for the Medicare Payment Advisory Commission (MedPAC) to begin calling for cuts. They specifically recommended a cut to base payment rates. These would initiate at the beginning of the fiscal year 2023. They also cited a rebound in industry transactions that justified a cut of 5%.

What are the criteria for the cuts?

The potential for incoming cuts in the new year has many people concerned about the future availability of skilled nursing. There are 4 basic factors that MedPac has cited as justification. These include:

  • Access to nursing care
  • Total quality of care
  • Access to capital
  • Access to Medicare payments that are designated to cover skilled nursing facility costs

Medical industry experts have confirmed that these suggestions are consistent with CMS’s previous call for cuts in these areas. The agency had previously faced a considerable amount of backlash when its Patient-Driven Payment Model (PDPM) increased payments to nursing homes by a factor of 5% or $1.7 billion.