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LTC industry uses election campaign to combat federal program cuts

October 18, 2012
by Bob Gatty
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With the national elections drawing ever closer, the long-term care industry continues to turn up the heat on lawmakers, urging them to avoid additional cuts in federal funds for programs that support services to the elderly.   

Employees of nursing homes and other LTC facilities, as well as all Americans concerned about these patients and residents, are being encouraged by the national trade associations to contact their lawmakers while they are home campaigning and urge them to avert automatic spending cuts that are due to take effect January 1 under the Budget Act of 2011.

As we reported last month, the American Health Care Association (AHCA) launched a TV ad campaign on cable outlets popular with lawmakers and their staffs asking them to prevent a 2 percent sequestration cut to Medicare during the post-election lame duck session of Congress.        

According to LeadingAge, the cuts would have the following impact on programs serving seniors:

  • Medicare reimbursement to health care providers will be cut by 2 percent, for a total $11 billion reduction in Medicare spending.
  • Funding for Section 202 housing will be cut by 8.2 percent, amounting to $31 million.
  • Section 811 housing for people with disabilities also would receive an 8.2 percent cut, amounting to $121 million.
  • Medicaid would be exempted from the automatic cuts.

“We must persuade Congress to take a thoughtful, balanced and fair approach to reducing the federal budget deficit without imposing a disproportionate burden on programs serving frail and low-income seniors,” said Marsha R. Greenfield, vice president of legislative affairs for LeadingAge.

She pointed out that Congress also must act on several Medicare issues during the lame duck session. “We must ensure the Medicare therapy caps exceptions process is extended. Action is also needed on the Medicare observation days issue to ensure that beneficiaries post-hospital nursing home stays are covered by Medicare.”

Beginning October 1, the Centers for Medicare & Medicaid Services (CMS) began to implement a phased therapy cap exception process that will conclude on December 31. If Congress does not act by then, a hard therapy cap will again be imposed on Medicare-covered therapy.      

Regarding the observation days problem, Sen. John Kerry (D-MA) and Rep. Joe Courtney (D-CT) recently introduced the Improving Access to Medicare Coverage Act, which is intended to resolve this issue. The measure specifies that a Medicare beneficiary hospitalized under observation for more than 24 hours would be deemed to have been an inpatient and considered to have been discharged upon leaving the hospital. Thus, the beneficiary would be eligible for Medicare part A coverage of post-acute care.    

Meanwhile, the Alliance for Quality Nursing Home Care, just prior to the vice-presidential debate between Vice President Joe Biden and Republican challenger Rep. Paul Ryan (R-WI) warned that proposals by both the Obama administration and House Republicans to lower states’ provider tax threshold will threaten nursing home patient care and threaten frontline staff jobs.      

The Alliance contends that states have disproportionately relied on provider taxes for skilled nursing facilities (SNFs) to fund their Medicaid programs as compared to other Medicaid providers. Substantially more SNF provider tax programs operate at or near the 6 percent federal ceiling than those for other providers, the association says

House Republicans have proposed reducing the threshold from 6 percent to 5.5 percent, cutting $11.3 billion in payments to all providers over 10 years, while the Obama administration has proposed cutting the threshold to 3.5 percent over three years, slashing $21.8 billion in payments to all providers over the same period. Alliance president Alan G. Rosenbloom warned that the lion’s share of those cuts likely would be borne by SNFs.

“Rather than enacting repeated cuts to government funding programs, we urge both parties to work together to rationalize the payment system for post-acute and long-term care by enacting thoughtful, bold reforms that would ultimately benefit patients, caregivers, providers and taxpayers,” Rosenbloom said.

The Alliance also pointed to data from Avalera that says $355.58 million in cuts to Medicare-funded nursing facility care kicked in on October 1 as a result of the Middle Class Tax Relief and Job Creation Act of 2012.

The cuts will be fully phased-in by 2015 and are part of broader $465 billion SNF funding reductions over 10 years as a result of several different budgetary actions and regulatory changes made by Congress and CMS since 2009, according to Avalera.

“No matter who eventually wins the White House and controls Congress

it will be imperative to pursue bigger-picture, systemic reforms in order to improve efficiency and optimize care quality once the election is over,” Rosenbloom declared.

Bob Gatty has covered governmental developments for the trade and business press for more than 30 years. He is founder and president of G-Net Strategic Communications, Sykesville, Md.  

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