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A look behind the headlines

May 5, 2011
by Bob Gatty
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Bob gatty
Bob Gatty


With so much effort underway in state capitals from Wisconsin to Florida to slash spending and close budget deficits, including efforts to reform state Medicaid programs, concern is building about the possible implications such actions might have on long-term care (LTC) facilities and their patients. Check out the headlines:

  • “Oklahoma Pools Call for Medicaid Overhaul”

  • “A Call for Medicaid Overhaul in New York”

  • “Ohio Governor Makes Medicaid Overhaul a Priority”

  • “National Governors Association Calls for Medicaid Overhaul”

  • “[Florida] State House Advances Medicaid Overhaul”

  • “Florida, Colorado, Connecticut Governors Ask White House for Medicaid Overhaul”

“As rumors swirl on Capitol Hill about overhauling the Medicaid system, it is the nation's elderly and most vulnerable citizens that stand to lose from these discussions,” warned Mark Parkinson, president and CEO of the American Health Care Association and National Center for Assisted Living (AHCA/NCAL). “Allowing state governments to implement Medicaid block grants and eliminate requirements for specific types of care or eligibility could jeopardize the care for many frail seniors and individuals with disabilities.

“While we understand that many states are facing looming budget challenges, these proposals fail to think of the long-term costs,” declared Parkinson, who is the former governor of Kansas and knows something about state budgets.

“Cutting Medicaid services, including long-term care, translates into higher hospitalization rates and other costs on the healthcare system. Meanwhile, providing states with a fixed dollar without accounting for the growing number of seniors that will require long-term care services will prove to be nonsustainable and fail to solve our budget crisis,” Parkinson said.

AHCA/NCAL points out that almost 64% of nursing home patients and nearly all of those with developmental disabilities, plus about 13% of those in assisted living, depend on Medicaid to cover their costs. Yet, the organization says that last year Medicaid underfunded nursing facility care nationally by $5.6 billion, an average of $17 per patient, per day. That number, AHCA/NCAL estimates, will grow with implementation of block grant programs. But that development, brewing in many states across the nation, was only one reason why industry government affairs representatives are popping their Excedrin these days.

In mid-March, the Medicare Payment Advisory Commission (MedPAC) recommended that Congress provide no FY 2012 cost-of-living adjustment for skilled nursing care, a development that drew immediate criticism from Parkinson and Alan G. Rosenbloom, president of the Alliance for Quality Nursing Home Care. “Stable Medicare funding is critical to extending this positive trend in improving quality, especially at a time when volatility in state Medicaid budgets has created a dramatic and worrisome squeeze on patient care, staffing, and facilities themselves,” they said in a joint statement. “With approximately 70% of facility costs related to labor, cutting the annual cost-of-living update has a direct, negative effect on patients, caregivers, and overall facility operations.” They also noted that through both federal regulatory and budgetary actions over the past two years, the nursing facility sector has been slated for nearly $30 billion nationally in Medicare cuts over the next decade.

Meanwhile, one of the legislative achievements for the LTC community last year, passage of the Community Living Assistance Services and Support (CLASS) Act, included in the healthcare reform law, has been called into question by House Republicans. The Department of Health and Human Services (HHS) is seeking $120 million in the 2012 budget to begin CLASS Act implementation, but Republican members of the House Energy and Commerce Committee's health subcommittee want to know why when HHS Secretary Kathleen Sebelius has said the program is unsustainable.

“If we have a program that everyone acknowledges is broken, why do we want to waste money educating people on something that might not work in its present form?” asked Rep. Bob Latta (R-Ohio) during a hearing on the program, which has been under increased scrutiny since President Obama's fiscal commission recommended its repeal.

Earlier this year, Sebelius said HHS will consider premium increases over time and tightening of eligibility standards to ensure the program's sustainability. “It would be irresponsible to ignore concerns about the CLASS program's long-term sustainability in its current form, and we haven't done that,” she said.

On another front, the competitive bidding requirements for durable medical equipment that are to replace the current Medicare fee schedule payment for such items have drawn fire from the industry. Under the program, suppliers submit bids electronically for selected products. Medicare will use the bids to set a single payment amount to replace the fee schedule amount as payment.

At a congressional briefing on the process, Cynthia Morton, executive vice president of the National Association for the Support of Long Term Care (NASL) said the program is flawed and will lead to serious ramifications for Medicare beneficiaries. “NASL is concerned that the…competitive bidding will compromise care for Medicare beneficiaries by restricting their access to vital products and services, undercutting the quality of items and services that they are furnished, and diminishing the timely responsiveness to their needs,” she said.

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