MedPAC Recommendations for Skilled Nursing Facilities

The Medicare Payment Advisory Commission (MedPAC) released its biannual report earlier this week. The report includes analysis and recommendations to improve the Medicare program including recommendations that would lower health care costs.
MedPAC's report included a recommendation to cut base pay by 5% for skilled nursing facilities in 2023, which was widely expected given the commission's draft recommendations in January included the SN cut recommendation. The group's report states that despite a decline in volume, Medicare's aggregate fee-for-service spending on nursing homes rose 2.7% between 2019 and 2020, due in part to the new case-mix system and the COVID-related policies. On a per day basis, payments to providers increased more than 8% for SNFs, while costs grew just 2.1%.

Mark Parkinson, President & CEO of the American Health Care Association/ National Center for Assisted Living notes, “The MedPAC report is outdated and obsolete at this point. Data from 2020 does not reflect the current state of the skilled nursing industry.”

Parkinson argued that since 2020, nursing home labor costs have skyrocketed and margins in 2022 are projected to be negative 4.8%. As an advisory body, MedPAC can only make recommendations to federal lawmakers, who are then free to pursue changes, if any, as they see fit. You can read the full report here:
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