Sequestration Looms

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All indications point to sequestration cuts going into effect on March 1st.  Skilled nursing facilities should do budget and cash flow planning now to prepare for the impact on reimbursement.  Sequestration will involve a two percent cut in Medicare payments, effective for services provided on or after April 1, 2013.  While there is little formal or practical guidance available to providers, it is our understanding that facilities should continue to bill at the FY2013 rates.  Any adjustments to reimbursement will be made by the Medicare Administrative Contractor (MAC) Palmetto GBA.

The Obama administration has estimated that sequestration would slash $11 billion from Medicare as a result of the two percent provider cut.  The impending budget action is meant to force a deal on long term deficit reduction.

Based upon recent average SNF payment information for calendar year 2011 developed by the Centers for Medicare and Medicaid Services (CMS), the average payment reduction for Virginia facilities attributable to a two percent sequestration cut would be approximately $8.00 per Medicare patient day.