Part 2 of a Series

On December 21, 2000, President Clinton signed into law the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000, part of Public Law 106-554. Sections of this law modify Medicare coverage, pay-ment mechanisms, and appeals procedures. 

The new law makes adjustments to the prospective payment system's (PPS) payments for skilled nursing facilities (SNFs), as well as some other changes.

• The reduction in the market basket update of PPS rates for SNFs is eliminated.
• The nursing component of the PPS federal rate is increased.
• Consolidated billing requirements for both Medicare Part A and Part B are limited.
• The payment for certain specified rehabilitation groups under the RUG-III categories is increased by 6.7%
• SNFs and nursing facilities are required to post information on nursing facility staffing.
• Medicare+Choice organizations (MCOs) are required to cover post-hospital SNF care in an enrollee's "home skilled nursing facility" under certain circumstances.

The Health Care Financing Administration has announced that the new federal reimbursement rates for Medicare+Choice managed care organizations beginning in March, 2001, as required in the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act, are now posted at www.hcfa.gov/stats/hmorates/aapccpg.htm.

Managed care organizations will see an increase of $9 billion in reimbursement and risk adjustment rates over the next five years. According to the legislation, managed care organizations that currently contract with HCFA may use the funds only to reduce beneficiary premiums or co-pays, enhance benefits, stabilize or widen the network of health care providers available to beneficiaries, or reserve funds to help offset premium increases or reduced benefits in the future.

To qualify for the increased rates, which are effective beginning March 1, 2001, managed care organizations that renewed their contracts with HCFA for 2001 are required by law to revise their Adjusted Community Rate Proposal (ACRP) and submit this to HCFA by January 18, 2001.