Shares of health-care providers tumble after Medicare announced late Friday that it will cut...

Shares of health-care providers tumble after Medicare announced late Friday that it will cut payment rates to skilled nursing facilities by 11.1% next fiscal year. The decision adjusts for an "unexpected spike" in nursing-home payments this fiscal year. SUNH -54.3%, KND -25.5%, SKH -39.2%, FVE -8.5%, ENSG -16.9%, SRZ -2.9%, NHC -12%, AMED -2.3% (earlier).

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Comments (2)
  • Duude
    , contributor
    Comments (3413) | Send Message
    When medicare cuts payment rates, health-care providers almost always transfer their costs to insurance paying and cash paying patients. Essentially other patients are subsidizing medicare with their higher premiums. This has got to stop. This is one of the primary reasons health insurance is increasing at such a dramatic rate. By design, employer health insurance will eventually drop coverage and pay a government fine leaving their employees with the government pool for coverage. The government pool that will be established in 2014 will follow in the footsteps of Medicare pushing companies into bailing on the ever-increasing cost of healthcare coverage. This all ends with a single payer system that will dictate prices paid, but with hospitals unable to transfer costs to others. That's when we really begin rationing care.
    1 Aug 2011, 10:08 AM Reply Like
  • Fran Murphy
    , contributor
    Comments (34) | Send Message
    Medicare rates are absorbed by skilled nursing facilities (SNF) directly not insurers or the public. SNF's manage these pricing changes by becoming better at scoring patients under the existing system; cutting costs; and, when necessary, restructuring via Chapter 11. Over the past year (including this decrease), Medicare rates have been a net positive (+3% or more) for SNF providers, just not the home-run they had hoped for. The good news for them is that they get to keep the one year windfall.
    1 Aug 2011, 10:50 AM Reply Like
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