(Reuters) - The U.S. government announced an increase in reimbursement rates to acute-care hospitals for 2012, a sharp contrast to the cut it announced for skilled nursing facilities on Friday.
The Centers for Medicare and Medicaid Services (CMS) increased payment rates to acute-care hospitals by 1 percent, compared with a 0.5 percent cut it had proposed earlier.
The CMS expects the rate increase will result in Medicare's operating payments to acute-care hospitals rising by $1.13 billion, or 1.1 percent.
On Friday, the CMS cut 2012 payments for skilled nursing facilities by 11.1 percent, or $3.87 billion, leading to a sharp decline in shares of Skilled Healthcare, Kindred Healthcare and Sun Health Care.
There was a broad sell-off in healthcare stocks on Monday on fears that the debt-ceiling deal to be voted on by the U.S. Congress would cut healthcare spending for federal programs such as Medicare.
Acute-care hospital operators such as HealthSouth Corp, Kindred Healthcare Inc, Tenet Healthcare Corp and Community Health Systems Inc are expected to benefit from the hike in payment rate.
(Reporting by Anand Basu in Bangalore; Editing by Roshni Menon)