Medicare program; optional payment system for low Medicare volume skilled nursing facilities--HCFA. Final rule

Area of Science:

• Healthcare Policy
• Geriatric Care
• Health Economics

Background:

• Skilled nursing facilities (SNFs) are crucial for post-acute care.
• Medicare reimbursement policies significantly impact SNF operations.
• Previous payment structures required detailed cost reporting.

Purpose of the Study:

• To outline a new payment option for eligible SNFs.
• To detail the components of prospective payment rates.
• To clarify changes in reimbursement for services furnished before and after October 1, 1993.

Main Methods:

• Final rule implementation.
• Definition of prospective payment rate components.
• Specification of effective dates for policy changes.

Main Results:

• SNFs providing fewer than 1,500 Medicare beneficiary days can elect prospective payment rates.
• Prospective rates are based on routine operating costs, capital-related costs, and return on equity (for proprietary facilities).
• The return on equity provision for proprietary SNFs is eliminated for services from October 1, 1993, onwards.

Conclusions:

• The final rule offers payment flexibility for smaller SNFs.
• The policy aims to simplify reimbursement for certain SNF services.
• Changes in the return on equity provision reflect evolving Medicare policy.