1.  Conflicting provisions of the Stimulus Bill and the Making Work Pay tax cuts may increase tax liabilities for some seniors in 2010.

Donald Lambro of the Washington Times writes that Social Security recipients who are still working may face "serious confusion" with their taxes as a result of the interaction of the $250 check sent to seniors with the $400 tax credit, both passed this year.

Since no one is allowed to fully benefit from both programs at the same time, it is possible that some money will have to be returned to the government.

Kevin Hassett, an economist with the American Enterprise Institute, said, "This is a compliance headache that borders on being a nightmare.  It's going to be complicated to reconcile these payments."

2.  The Centers for Medicare and Medicaid Services (CMS) has proposed a new rule to cut payment rates for Medicare nursing facilities in Fiscal Year (FY) 2010.

The rule calls for a 3.3% reduction in payments to nursing homes, which amounts to  $1.050 billion.

In addition, this proposed rule would:

• Revise the classification methodology and implementation schedule for FY 2011, to reflect updated staff time measurement data;
• Invite comment on a possible new rate component to account for the use of non-therapy ancillaries;
• Include information on the transition to the redesigned nursing home resident assessment instrument, including an implementation schedule; and
• Invite comment on a possible new requirement for the quarterly reporting of nursing home staffing data.

The proposed rule, including information on how individuals may submit public comments, is online at http://www.federalregister.gov/OFRUpload/OFRData/2009-10461_PI.pdf

3.  Medicare has proposed policy and payment rate changes for patient stays and Acute Care and Long Term Care hospitals.

The Centers for Medicare and Medicaid Services (CMS) wants to update Acute Care hospital rates by 2.1% for inflation, less an adjustment of 1.9% to remove the effect of increases in payments due to changes in documentation and coding practices.

Likewise, CMS is proposing to update Long Term Care hospital rates by 2.4% for inflation, less an adjustment of 1.8% to account for the same changes. 

Last October, Medicare adopted a new classification system to better recognize severity of illness and the cost of treating Medicare patients.  Although CMS has the authority to make a much greater downward adjustment to payment rates to address these changes, the adjustment are being phased-in over time.

The proposed rule would apply to approximately 3,500 Acute Care hospitals and 400 Long Term Care hospitals.

Charlene Frizzera, Acting Administrator of CMS, said, "We understand hospitals will be concerned about lower than historical update amounts.  However, we are proposing an adjustment that minimizes the effects on 2010 payments, while still meeting the requirements of the law, which may mean larger reductions in the next two years.  We are asking for comments from the public to help us ensure that these proposals are the best ways to meet the requirements of the law."

The proposed rule, including procedures for public comments, is online at http://www.federalregister.gov/OFRUpload/OFRData/2009-10458_PI.pdf