Medicare Compliance & Reimbursement

2008 proposed rule sets out to update the market basket.

If your rehab services get paid on a skilled nursing facility prospective payment system (SNF PPS), Medicare plans to increase your payments in 2008.

In an April 30 announcement, the Centers for Medicare & Medicaid Services (CMS) proposed a payment increase to nursing homes of approximately $690 million.

This 3.3-percent increase would affect payment rates to nursing facilities that furnish certain skilled nursing and rehabilitation care to Medicare beneficiaries recovering from serious health problems, CMS said in a press release.

Under Medicare's SNF PPS, each facility gets paid a daily rate based on the relative needs of individual Medicare patients--adjusted for local labor costs. The daily rate covers the costs of furnishing all covered nursing facility services, including routine services such as room, board, nursing services and some medical supplies. Additionally, the daily rate covers related costs, such as therapies, drugs and lab services, and capital costs, CMS explained.

Don't miss: The 2008 proposed rule includes a suggestion to revise the market basket, which currently reflects data from fiscal years 1997 to 2004. CMS uses a SNF "market basket" to measure changes in the prices of an appropriate mix of goods and services included in covered skilled nursing facility stays. The agency measures the price of items in the market basket each year and adjusts payments accordingly.

The new payment rates also continue to include a special adjustment made to cover the additional services required by nursing home residents with HIV/AIDS.

You can read more details about the payment increase in the SNF PPS proposed rule for FY 2008, on the CMS Web site at www.cms.hhs.gov/providers/snfpps. CMS expected it to be published in the Federal Register on May 4, 2007, and the agency will accept public comments until June 29.