May 08 | Client Alert: Medicare Skilled Nursing 2% Increase in Part A Reimbursement Rates

May 8, 2014

Client Alert
Medicare Skilled Nursing 2% Increase in Part A Reimbursement Rates

On May 1, 2014 the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule [CMS-1605-P] detailing the Medicare Payment Rates for skilled nursing facilities for fiscal year 2014 (starting October 1, 2014), which includes a 2% increase in Part A reimbursement rates. Click here for a fact sheet from CMS.

What you need to know:

  1. CMS projects a 2% increase
    • 2.4% Market Basket Increase
    • .4% Productivity Adjustment Decrease
  2. Market Basket Update
    • New wage index based on the recent Office of Management and Budget changes to the delineation of statistics - click here
    • To mitigate any negative impact this could cause to some providers, the wage index would consist of a blend of 50% current delineations and 50% of updated delineations

Special thanks to American Heath Care Association (AHCA) for this helpful calculation tool to help you plan for the proposed rule: AHCA Rate Calculation Tool and Comparison

How to Use this Medicare Rate Calculator:

  1. Click on the link and download or save the file: AHCA Rate Calculation Tool and Comparison
  2. Go to the worksheet tab titled "User Input" and click in Cell "C2.”
  3. Select the "State" in which your facility is located from the drop down list found in Cell "C2" of the "User Input" tab. Click in Cell "G2" of the "User Input" tab and select the "County" in which your facility is located. (Note: The county in which your facility is located will not show up in the drop down list if your facility is in a "Rural" county as designated by CMS. If this is the case you should select "Statewide" as the County designation for your facility).
  4. Input your facility's Medicare Patient Days by RUG category into the green shaded cells found in Rows 6 through 29 of Columns C, F and I on the "User Input" tab. (Note: Failure to enter Medicare patient day information will prevent the tool from calculating the average Medicare rate for your facility for FFY 2014 (Oct 2013-Sept 2014) and FFY 2015 (Oct 2014-Sept 2015). We recommend using at least 6 months of historical Medicare days by RUG category in order to avoid fluctuations in the distribution of patients that may occur if a shorter time period is used).
  5. Go to the worksheet tab titled “Summary” to review the analysis of Medicare rates, wage indexes and a summary of distribution of Medicare days across RUG categories.
  6. Go to the worksheet tab titled “Facility Rate & Revenue Calc” to review the actual FFY 2014 (Oct 2013-Sept 2014) and FFY 2015 (Oct 2014-Sept 2015) Medicare rates by RUG category.

We will keep you updated as more unfolds. We hope you find this information valuable. As always, we are here to help. If there is any way our team can assist you, please do not hesitate to contact us.

Sincerely,

Tiffany M. Karlin
Director of Healthcare Services
tkarlin@muellerprost.com
800.649.4838

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