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By Kim Dixon
WASHINGTON May 1 The government's Medicare
program on Thursday proposed payment cuts to reimburse nursing
homes that treat more than 1 million of the nation's elderly.
The Centers for Medicare and Medicaid Services (CMS)
announced a proposed 0.3 percent cut to reimbursements, which
if enacted will hurt Kindred Healthcare Inc (KND.N), Skilled
Healthcare Group Inc SKH.N and Sun Healthcare Group Inc
The looming decision has beat down shares of publicly
traded nursing homes since February, when a proposal to trim
$4.7 billion in payments over five years first surfaced.
Analysts said they were still dissecting the roughly 100-
page proposal, but several said it was in-line with market
expectations. Some earlier said the initial proposal in the
president's budget could be softened, due to lobbying from
industry and lawmakers. That did not appear to happen.
"Clearly CMS is flexing their muscle," Ipsita Smolinski, a
Washington analyst at JP Morgan said.
The rule is still subject to public comment period for
Earlier in the day, a trade group for nursing homes put out
an estimate the cuts could have a total economic impact of $4.2
billion in one year, impacting jobs and state tax revenue.
"This is a net negative for the profession as it's proposed
right now," said Susan Feeney, a spokeswoman for the American
Health Care Association (AHCA).
The analysis was conducted by the consultants the Lewin
Nursing home companies rely on government health care
funding to pay for most of their services. Between 1 million to
1.5 million Americans live in nursing homes, a number expected
to swell as the baby boomer population ages.
(Reporting by Kim Dixon; Editing by Andre Grenon)