Long Term Care

More Money for Medicare Beneficiaries Using Skilled Nursing Facility Care

Medicare beneficiaries using skilled nursing facility (SNF) care will see their payments increase by approximately $690 million, or 3.3 percent, in the 2008 fiscal year due to new Medicare payment rates from the Centers for Medicare & Medicaid Services (CMS). In addition to skilled nursing facilities, this price hike will be seen in hospitals that provide certain skilled nursing and rehabilitation care to Medicare beneficiaries recovering from serious health problems.

"These new payment rates reflect our commitment to improving the quality of care in the long-term care setting while maintaining predictability and stability in payments for the providers who deliver those important services," said CMS Acting Administrator Herb Kuhn. "They will enable nursing homes and Medicare to continue to move forward in providing quality services for patients who need post-acute care. The SNF rule demonstrates our commitment to ensure that Medicare is affordable for current beneficiaries and is sustained for future generations by paying accurately and efficiently."

Under Medicare's SNF prospective payment system, these facilities are paid daily rates based on the needs of individual Medicare patients. Daily rates cover the cost of furnishing the facility services, including routine services such as room, board, nursing services and some medical supplies together with related costs such as therapies, drugs and lab services; and capital costs including land, buildings and equipment. Local labor costs are factored in as well.

CMS uses a SNF market basket to measure changes in the prices of an appropriate mix of goods and services included in covered stays. The price of items in the market basket is measured each year, and Medicare payments are adjusted accordingly.

Source: Centers for Medicare & Medicaid Services, July 31, 2007

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