AIDS nursing homes to get better Medicare deal

Nursing homes treating patients with Acquired Immune Deficiency Syndrome—AIDS—will see an increase in their Medicare payment rates this fall, according to Mark B. McClellan, M.D., Ph.D., administrator of the Centers for Medicare & Medicaid Services, the agency that oversees the program.

According to a provision in the new Medicare reform law, nursing homes will get an increase of 128 percent over the rates they currently receive for the care of these patients.  CMS has sent a notice to its fiscal intermediaries to institute the new payment rate as of October 1, 2004.

“The care of patients with AIDS can be extraordinarily high,” McClellan said, “This action to implement the new payment rate reflects the increased costs associated with caring for this special group of beneficiaries.  We want to take whatever steps are necessary to assure continued access to care for people living with AIDS.”

Daily payment rates for nursing homes are paid prospectively and determined by a classification system based on the needs of Medicare patients.  These individual classification groups are known as Resource Utilization Groups or RUGs.   Today’s announcement is consistent with the payment system’s practice of paying higher rates for sicker or more complicated nursing facility patients.

Medicare’s skilled nursing facility prospective payment system (SNF PPS) is based on these RUGS and is adjusted for local labor costs.  The daily rate covers the costs of furnishing all covered nursing facility services, including routine services such as room, board, nursing services, and some medical supplies; related costs such as therapies, drugs and lab services; and capital costs including land, buildings and equipment.