The federal government has proposed a 1.2% cut in payments to nursing homes from the Medicare program as part of regulations that would take effect this fall.

Centers for Medicare and Medicaid Services, or CMS, announced the proposed payment cut, which would amount to $390 million. The cut takes into account a 3.3% reduction in payments based on changes to CMS payments to skilled nursing facilities for "medically complex" patients and a 2.1% increase to account for inflation.

Publicly traded nursing home and home health provider companies include Kindred Healthcare Inc. (KND), Skilled Healthcare Group Inc. (SKH) and Sun Healthcare Group Inc. (SUNH).

The agency will accept comments on the proposed regulations until June 30.

-By Patrick Yoest, Dow Jones Newswires; 202-862-3554; patrick.yoest@dowjones.com