Briefing Chartbook on the Effect of the Balanced Budget Act of 1997 and the Balanced Budget Refinement Act of 1999 on Medicare Payments to Skilled Nursing Facilities
May 2000
Alliance for Quality Nursing Home Care, American Health Care Association
A new Lewin study shows that Medicare's funding of skilled nursing care has been significantly reduced by nearly twice as much as Congress intended. Currently, CBO budget figures show Medicare spending for SNF services from 1998 to 2002 will be $12.2 billion less than originally projected when the Balance Budget Act (BBA) was enacted in 1997; and $15.8 billion less when extended to 2004. Due to BBA payment reductions, the current low inflation rate, provider concerns about fraud and abuse, etc., Medicare SNF spending actually decreased from $13.6 billion in 1998 to $12.3 billion in 1999. These funding reductions have forced approximately 1600 SNFs that participate in Medicare into bankruptcy, and have markedly diminished the industry's ability to attract capital financing.