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Bring back the Boren Amendment?

April 1, 2008
by Philip Cyr
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As part of the Omnibus Reconciliation Act of 1980, the Boren Amendment (named after David Boren, Oklahoma's Democratic senator) required that Medicaid nursing home rates be “reasonable and adequate to meet the costs which must be incurred by efficiently and economically operated facilities in order to provide care and services in conformity with applicable state and federal laws, regulations and quality and safety standards.” In passing this, Congress had taken a stand: Care of the nation's elderly in nursing homes was an important thing.

State governors disliked the Boren Amendment. If they tried to reduce Medicaid nursing home payments, the nursing home associations threatened to sue under the Boren Amendment.

In 1997, the 50 governors finally had their wish granted. The Boren Amendment was repealed as part of the Balanced Budget Act of that year. The nursing home industry warned that care would suffer, that the states could not be trusted to maintain adequate payment levels. Apparently, however, Congress no longer thought that quality nursing home care had to be a guaranteed thing.

Fast forward to 2007. The National Commission for Quality Long-Term Care releases its list of recommendations to improve quality in long-term care entitled, “From Isolation to Integration.” I very much appreciate the current and former congressmen, senators, governors, and others for taking their valuable time to produce this excellent work. However, is not the necessity of its release evidence that the industry's fears of 10 years ago were well founded? I know the document only looks to the future and doesn't discuss how and why we got where we are today, but we should make note of the past to avoid repeating similar mistakes in the future.

Should the Boren Amendment be re-enacted, or have the states allowed payments to fall so far behind that bringing it back would only bankrupt many of them? The states have proven that they cannot be trusted. The commission's report maintains that this is a national problem requiring a national solution.

Moving Medicaid funding of nursing homes from the states to the federal level—one proposed reform—can be a double-edged sword. As usual, it comes down to money. If federal payments are adequate (i.e., greater than current) then all is fine, but with such large disparities in the cost of care across the 50 states, the payment mechanism would be far from a simple one. Increased complexity usually adds to cost, which we cannot afford to do. Keeping the payment system at the state level allows every provider greater access to the decision makers who control the payments. I prefer to keep it at the state level.

Less than 100 years ago, families took care of their own elderly. I presume that the care was not as good as it can be today, especially with the advances in healthcare. Today's society is different, and average citizens are not trained to render the quality of care now possible by long-term care providers. That does not preclude families from contributing to the cost, if they are able to. I have never understood the rationale behind Medicare and Medicaid, requiring providers to accept their payment as payment in full. If a state Medicaid payment falls $10 per day short of cost, why not ask the resident's adult children to pitch in $300 per month for their mother's care? Asking three adult children to each contribute $100 per month would also help alleviate any guilt feeling they may have in not caring for mother themselves.

It has been said that anything that government does, free enterprise can do better, and for less cost. With Medicare and Medicaid as the primary payers of healthcare in the United States, is the government a contributing factor to out-of-control rising health costs? Whether you are a nursing home or a hospital, the Centers for Medicare & Medicaid Services (CMS) regulations largely control how your facility operates, and most of us will agree that without CMS, we could be more efficient and less costly. Although Medicare has been a godsend to many, I have often wondered how healthcare would look or how much it would cost if it had never been passed and instead we all had private health insurance.

My preference would be for us to adopt a voucher system similar to the food stamp program. The voucher's value would be determined by a physical assessment of the person's needs. It would allow the recipient to choose whether to use the voucher for home care, assisted living, or nursing home. If they chose an option that cost more than the voucher, then adult children would be allowed to make up the difference. This is consumer empowerment at its best. It also encourages the children to get involved if they are not.

Throw out the Certificate of Need laws and let anyone who satisfies the licensing regulations go into business. Only those who have satisfied customers (best “bang for the buck”) would survive. With free enterprise at work, fewer government surveyors would be required. This would help shrink the bureaucracy. Think about it; we do not need government inspectors to determine which hair salons or other personal services stay in business. We, the consumer, do that with our feet. If we don't receive fair value, we go elsewhere. Healthcare should be no different.

Where we go from here and what the future looks like, is a wide open topic. I believe in less government involvement because government adds to cost. Private individuals usually take on more responsibility for matters if they have to pay for at least part of them, including their health and that of their parents. Either we bring back the Boren Amendment or go to something new, like a voucher system. As the Commission for Quality LTC alluded to, we have limited time to act, as the baby boomers are coming soon.

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