Nursing home operators will receive an aggregate $750 million Medicare pay increase for fiscal year 2021 under a final rule announced Friday by the Centers for Medicare & Medicaid Services.

It would amount to a 2.2% net increase starting Oct. 1, 2020, when fiscal year 2021 begins. 

Originally, CMS proposed at 2.3% net increase, or $784 million, for fiscal 2021. That would have been the byproduct of a 2.7% market basket increase, less a 0.4% reduction for multifactor productivity adjustment.

This estimated increase is attributable to a 2.2% market basket increase, and adjusted by a 0.0 percentage point productivity adjustment, the agency explained. 

CMS also plans to apply a 5% cap to any decreases in a providers wage index from fiscal 2020 to 2021 under the rule. That will be informed by revised geographic delineations provided by the Office of Management and Budget to identify a provider’s status as an urban or rural facility and to calculate the wage index. 

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