CMS eliminates $3.9 billion overpayment to nursing homes

NEWS IN BRIEF — Posted Aug. 8, 2011

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Medicare rates for nursing homes will drop by 11% in 2012 to correct a spike in payments and to align pay more closely with actual costs, according to a Centers for Medicare & Medicaid Services final rule.

CMS found that the current skilled nursing facility payment system has increased Medicare expenditures in 2011 significantly. The agency pointed to utilization of therapy modes under a new classification system that strayed from projections.

"Additional data analyzed by CMS since publication of the proposed rule confirmed the extent of the overpayments that have occurred since implementation" of the pay system, said Jonathan Blum, CMS deputy administrator. "We are also making several improvements to our payment system to strengthen its integrity."

Changes to the system will produce a $3.9 billion net pay reduction to nursing homes, CMS states in the July 29 rule.

Note: This item originally appeared at

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