Updated Medicare Projections Indicate Additional Cuts Unnecessary

Payments to Medicare providers, including skilled nursing facilities, will not have to be cut this year, the Centers for Medicare and Medicaid (CMS) has announced.  In a memo to CMS’ Acting Administrator Marilyn Tavenner, the agency’s Acting Chief Actuary Paul Spitalnic indicated that projections for Medicare’s per capita growth rate were within targeted spending rates laid out in President Obama’s health care reforms.

The memo comes as good news for providers. Under the Affordable Care Act, if projections exceed spending targets, the newly created Independent Payment Advisory Board is required to identify ways to cut Medicare spending.  Mr. Spitalnic’s memo suggests that additional cuts may be averted in future years.  “The projected five-year average growth in Medicare per capita spending is 1.15 percent, and the five-year average growth target is 3.03 percent,” according to his memo.  “Because the projected five-year Medicare per capita growth rate does not exceed the Medicare per capita target growth rate, there is no applicable savings target for implementation year 2015 (determination year 2013).”