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Challenge: Maintaining Quality Services ... ... When Funding Continues to Shrink

March 1, 2010
by root
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At press time, the legislative landscape in Washington has changed dramatically. A Republican, Sen. Scott Brown, was elected to the Massachusetts U.S. Senate seat long held by the late Sen. Ted Kennedy. This change altered the Democratic majority in the Senate from 60 to 59 Democrats. Senate Democratic leadership is now no longer able to pass the healthcare reform bill that was previously thought of as a “done deal." Congressional leaders are now pondering how they can recraft healthcare reform, if at all. In our exclusive interview, Long-Term Living Editor Maureen Hrehocik talks with Barbara Gay, director of advocacy information for the American Association of Homes and Services for the Aging, and Cynthia Morton, vice president of political affairs for the American Health Care Association, on long-term care policy and future trends. According to Ms. Morton, various pieces of the healthcare reform bills (reimbursement cuts, CLASS Act), that directly impacted long-term care, could still surface in subsequent legislation.

Editor's note: Because of publishing deadlines, this interview was conducted in January.

What are the biggest issues facing long-term care in 2010?

Morton: No doubt there will be challenges in implementing the changes that will come for nursing homes if Congress completes the healthcare reform legislation. From what we know now in the legislation, these challenges could include reimbursement decreases, new regulatory burdens, and possible updates to the payment system. Additionally, it's very important to remember that nursing facilities are employers and will have to meet any and all new employer requirements including possible new costs for insurance. Other significant issues revolve around our ability to sustain and enhance the quality gains we have made and continuing to maintain and attract the staff we need to continue providing quality long-term care.

Gay: The continuing challenge is providing the highest quality services with resources that often do not meet costs. The opportunities are finding new ways to manage services for the best clinical outcomes to be achieved at the lowest possible cost. AAHSA remains strongly concerned about the maintenance of Medicare and Medicaid financing for our field. We have advocated heavily in favor of full Medicare payment updates for nursing homes and home care providers.

At this time (January), how is the Obama healthcare reform bill shaping up to include long-term care in a meaningful way?

Gay: AAHSA is very pleased that both the House and Senate healthcare reform bills include the Community Living Assistance Services and Supports (CLASS) plan. This initiative will establish a national insurance program to finance long-term services and supports. Consumers will gain both a structure for planning more responsibly for their own long-term services and supports needs and more control over what services they receive in what setting. Providers will gain a more diversified source of financing for the services they provide. We are concerned about provisions in the House bill that would eliminate the 2010 Medicare payment update as of January 1, and we are urging House-Senate conferees not to include these provisions.

Morton: At this time, both the House and Senate bills make cuts to funding for nursing home care in order to pay for other parts of the bill. The bills also add regulatory changes that are linked to “transparency” in nursing homes. What is not addressed, and many on the Hill admit was just too big to tackle in this bill, is addressing reform of long-term care financing. True reform of the post-acute sector still needs serious attention.

What is the Medicaid payment outlook for 2010? Any big differences from 2009?

Morton: I would say that the Medicaid payment outlook for 2010 is “bleak,” to quote the AHCA-released Eljay study of the nation's Medicaid financing system for nursing homes. Looking into next year, the report states that 2010 and 2011 will be worse than any other year in the last seven years in which the report has been compiled. One major change is that we will see the expiration of the Medicaid stimulus dollars at the end of 2010. The pending healthcare reform bills would continue the Medicaid stimulus funds for six months. Data from the 2009 study tells us that states cumulatively underfunded the actual cost of providing quality long-term care by nearly $4.6 billion for 2009 (http://www.ltlmagazine.com/09MedicaidShortfallReport) and finds that care of seniors in New York, Illinois, Ohio, Texas, New Jersey, Pennsylvania, Massachusetts, Florida, California, and Wisconsin will bear the brunt of the underfunding burden, especially at a time when these states and many others are already suffering from rising pressure on state Medicaid budgets. 2010 doesn't bode much better.

Gay: States will continue to benefit from the increased federal Medicaid match that was included in the American Reinvestment and Recovery Act (ARRA) through the end of 2010. We are concerned about the cliff that then will occur when the federal Medicaid match falls to its pre-ARRA levels. We support provisions of the House healthcare reform bill that would extend the increased Medicaid match for another six months. This is very important, as most states are still experiencing lagging revenues due to the recession. State cuts in Medicaid spending generally fall most heavily on provider payments and on the optional services that include home- and community-based services.

How important to long-term care are the CLASS Act provisions?

Gay: As previously stated, we think the CLASS provisions are highly significant to the future of our field.

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