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Nursing home industry proposes alternative to funding cuts
The nursing home industry is attempting to fend off deep Medicare cuts by proposing its own ideas on ways to reduce out-of-control Medicare spending.
The proposal comes as lawmakers are considering billions of dollars in cuts to the healthcare industry to pay for a temporary postponement of physician payment cuts scheduled for March 1.
Instead of taking a $2 billion hit through the elimination of so-called "bad debt," the American Health Care Association is proposing to save at least that much money by making sure patients discharged from the hospital stay healthy.
"That's why AHCA has developed a plan that provides incentives for centers to reduce hospital readmissions in order to meet fiscal goals," the trade association said in a summary of its proposal, "but also helps skilled nursing providers continue to improve quality care."
The strategy is reminiscent of the healthcare reform debate, when the Obama administration urged the healthcare industry to offer savings on its own instead of facing arbitrary cuts. The nursing home industry says it has shared its proposal with House Ways and Means Committee staffers and that federal Medicare officials have also expressed interest.
The proposal's aim is to prevent proposed reductions in bad debt coverage from the federal government, which would cause the nursing home industry to lose about $2 billion between 2014 and 2021. The provision helps healthcare providers make up for patients who don't have insurance or cash to pay for out-of-pocket costs.
Under the alternative proposal, nursing homes would commit to saving the Medicare program at least $2 billion by cutting back on hospital readmissions. If they fail, skilled nursing facilities would see cuts to their Medicare rates to make up for the difference.
