Kindred Healthcare, Inc. (the "Company") (NYSE:KND) today provided its estimate of the revenue effect of proposed rate changes to Medicare Part B therapy services included in the proposed Medicare Physician Fee Schedule rule. The proposed rule was released by the Centers for Medicare and Medicaid Services ("CMS") on June 25. The proposed rule is subject to a 60-day public comment period and is scheduled to become effective January 1, 2011.
The proposed rule provides for a rate reduction for reimbursement of therapy expenses for secondary procedures when multiple therapy services are provided on the same day. CMS projects that the proposed rule will result in an approximate 10% rate reduction (net of a 2.2% rate increase enacted recently as part of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010) for Medicare Part B therapy services in calendar year 2011.
Based upon the Company's historical Medicare Part B therapy services data, the Company estimates that this proposed rule would reduce the Company's Medicare revenues related to Part B therapy services by approximately $11 million per year beginning in 2011. The Company is continuing to evaluate the impact of the proposed rule on its operations.
Paul J. Diaz, President and Chief Executive Officer of the Company, commented, "We are disappointed that CMS has proposed these further reimbursement reductions without prior dialogue or consultation with the rehabilitation provider community and the beneficiaries who benefit from this care. We will use the comment period to engage CMS in a constructive discussion of the significant benefits patients receive from these needed services."
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