Medicare Compliance & Reimbursement

The sunset of Medicare add-on payments last year, looming therapy caps, proposed bad-debt reimbursement changes and tight Medicaid budgets make for a stormy reimbursement forecast for long-term care facilities. Even the Centers for Medicare & Medicaid Services admits that its own policies appear to be taking a toll on the nursing home industry. In "Health Care Industry Market Update: Nursing Facilities," the agency notes that Wall Street has a generally bleak view of the industry, thanks to "uncertainties related to government payment and the rising cost of liability insurance."

While the 2.9 percent Medicare payment increase slated for 2004 is welcome, it may not be enough: "The nursing home industry continues to be in dire straights," says one analyst quoted in the report. To see the report, go to http://cms.hhs.gov/reports/hcimu/hcimu_05202003.pdf. Lesson Learned: While the outlook is generally bleak for long-term care, analysts suggest that companies that diversify into assisted living and continuing care retirement centers may be in a better position to weather the tough times.