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Policy Brief: Medicare Reimbursement Rate

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Policy Brief: Revised Medicare Reimbursement Rate
Summary
Skagit County has approximately 120,365 people. In this population, 22,508 people, or
roughly 18.7% of Skagit County, are 65 years and over (US Census Bureau, 2015). In general,
our countrys geriatric patient population is growing and will continue to grow as people live
longer. There are six nursing homes present in Skagit County: Fidalgo Care Center, San Juan
Rehab and Care Center, Prestige Care & Rehabilitation, Life Care Center of Mount Vernon, Mira
Vista Care Center, and Life Care Center of Sedro Woolley (Medicare/Medicaid Nursing Homes
& Skilled Nursing in Skagit and Whatcom Counties Washington State, n.d.). The need for
nursing homes in Skagit County continues to rise. Roughly 500 patients are served by these six
nursing homes (Morris et al., 2015). These six nursing homes in Skagit County are at risk of
going out to business over the next few years.
Background
Skagit Valley nursing homes are at risk for shut down. This is related to the regions
reimbursement rate of Medicare. The current reimbursement rate is calculated and annually
adjusted related to area wages. The problem with this method is that Skagit Valleys two
hospitals are receiving payment on par with the rate of Seattle, WA. In 2014 the nursing homes
of Skagit County faced wage index cuts and have survived up to this point. There is another
payment cut scheduled in October and the six nursing homes are crying out. This cut may force
these 6 nursing homes to close their doors, inevitably leaving them unable to care for their 510
patients collectively (Morris et al., 2015).

Recommendations
The concern with the Medicare cuts is that patients residing in SNFs are at risk of losing
their homes. If the facilities are not reimbursed adequately, the facility will have to close down.
The recommendation from Governor Jay Inslee is, to explore options for increasing the
flexibility of the SNF payment methodology (Inslee, J, 2015, pp1). Morris et al. (2015),
recommends that the Washington State Deputy Administrator & Director, Sean Cavanaugh, uses
his authority to address this situation. There needs to be a policy change for budget cut
parameters for nursing homes. This could be done by removing the connection with the wage
index and the hospitals. According to Morris et al. (2015), the two county hospitals are paid
according to the Seattle-Bellevue-Everett Medicare wage index (pp1).
If nursing homes were represented as a separate entity or paid on a higher wage index,
nursing homes would be able to remain open and serve their patients. At this point there is a
disconnect with the numbers that the index sees and the actual financial situations at these
facilities. In section 1888(e)(4)(G)(ii) of the Social Security Act states that the Secretary should
be adjusting the wage levels in different areas using a wage index that they find appropriate
(Centers for Medicare & Medicaid Services, 2015). This has been addressed in the past, it seems
there needs to be more strict guidelines for the adjustments and what wages are used for
adjustments. I urge you to review these statistics and save these nursing homes so the 22,508
people over 65 and older have a chance to stay in their long term homes.

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References
Wage Index. (2015, October). Retrieved March 01, 2016, from
https://www.cms.gov/Medicare/Medicare-Fee-for-Service
Payment/SNFPPS/WageIndex.html
Morris, R., Kristiansen, R., Smith, R., Lytton, R., Scott, R., Hayes, R., . . . Bailey, S. (2015,
December 22). US Center for Medicare Services [Letter to S. Cavanaugh].
Skagit County QuickFacts from the US Census Bureau. (2015, December 2). Retrieved February
27, 2016, from http://quickfacts.census.gov/qfd/states/53/53057.html
Medicare/Medicaid Nursing Homes & Skilled Nursing in Skagit and Whatcom Counties,
Washington State. (n.d.). Retrieved February 27, 2016, from
http://www.dibbern.com/nursing-homes/washington/Whatcom-Washington-StateNursing-Homes.htm