Medicare cuts payments to nursing homes

Nursing homes will see a double-digit drop in their Medicare payments next year.

The Centers for Medicare and Medicaid Services (CMS) on Friday finalized an 11 percent cut in payments to nursing homes. CMS proposed the cut in April, saying Medicare made unexpected extra payments under a new classification system and that a cut is needed in order to recapture that money.

The American Health Care Association, which represents nursing homes, said the cut endangers thousands of jobs as well as the quality of nursing-home care.

"This will threaten our ability to provide quality care to America’s seniors ... At such a critical time, while we already face drastic cuts to Medicaid at the state level and a fragile economic recovery, this was unnecessary," AHCA President Mark Parkinson said in a statement.

The 11 percent payment cut will amount to roughly $3.8 billion, CMS said.

Also on Friday, CMS announced modest payment increases for hospice and rehabilitation facilities.

Medicare will pay inpatient rehabilitation facilities roughly 2 percent more next year, at a cost of around $150 million. The regulation setting those rates also establishes a new quality-reporting program for rehabilitation facilities.

Hospices will see a 3 percent increase in Medicare payments, mostly to cover the rising cost of providing care.