*This is an archive page. The links are no longer being updated. 1994.01.06 : Medicare Limits on Skilled Nursing Facilities Contact: Anne Verano Thursday, Jan. 6, 1994 (202) 690-6145 Medicare Limits on Skilled Nursing Facilities Medicare savings of $240 million over three years will result from legislation freezing the limits on costs that skilled nursing facilities can claim for Medicare reimbursement, HHS Secretary Donna E. Shalala announced today. "Effective control of costs by all sectors of the health care industry is essential if we are to achieve President Clinton's goal of universal health care coverage for the American people," Secretary Shalala said. The Omnibus Budget Reconciliation Act of 1993 prohibits changes in routine skilled nursing facilities cost limits for reporting periods beginning in fiscal years 1994 and 1995. A regulation implementing the prohibition is published in today's Federal Register. "The new law provides skilled nursing facilities with a strong incentive for efficiency," said Bruce C. Vladeck, administrator of the Health Care Financing Administration. "HCFA is also developing options for a prospective payment system that will encourage SNFs to be more efficient." Medicare payments for routine inpatient care in SNFs are based on costs, subject to the limits. The freeze on SNF cost limits will save an estimated $30 million in FY 1994, $120 million in FY 1995 and $90 million in FY 1996. The SNF benefit under the Medicare program serves patients who need additional treatment or rehabilitation following discharge from inpatient hospital care. The Medicare SNF benefit is available only after three consecutive inpatient hospital days and for the care of conditions that were treated during hospitalization or developed during hospitalization. Medicare does not cover long-term care in nursing homes. Medicare will spend approximately $5.4 billion in FY 1994 for SNF care. The Health Care Financing Administration is the federal agency that administers the Medicare program. ###