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For Medicaid, relief is on the way

October 1, 2010
by Bob Gatty
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State officials across the nation are now preparing for a continuing infusion of additional Medicaid money as a result of Congressional passage of legislation in August that extends through June 30, 2011 increased matching funding that had been scheduled to expire at the end of this year.

Just a week after President Obama signed the bill on August 10, federal Medicaid officials sent out directives to the states advising them of the steps they needed to take to obtain the additional revenue, which had been vigorously sought by the U.S. long-term care industry.

The higher rates were originally authorized by the American Recovery and Reinvestment Act, the broad economic stimulus law passed by Congress to help spur the nation's economic recovery. The measure will provide an estimated $16 billion to the states to help meet their needs, including those involved in providing Medicaid services. However, the funds are not specifically designated for nursing home care, and the industry must remind state officials of the need for a fair share of support.

“The individuals who rely on Medicaid for skilled nursing care have more medically complex needs than ever before, and this immediate infusion of funds is vital to ensuring their needs can be met,” the Alliance for Quality Nursing Home Care said in a statement following passage by the House of the extension of the enhanced Medicaid Federal Medical Assistance Percentage (FMAP), which provides the additional resources.

“This funding is critical to preserving resident choice and maintaining home- and community-based services options,” said Bruce Yarwood, president and chief executive officer of the American Health Care Association (AHCA) and National Center for Assisted Living (NCAL); and Alan Rosenfeld, president of the Alliance.

“Our work is not done,” they said. “In the coming weeks, AHCA, NCAL, and the Alliance will turn our efforts to the statehouses, urging governors to remember those living in nursing and assisted living facilities, and the citizens who care for them every day. We urge the nation's governors to do what is necessary, and do what is right, to safeguard those who have contributed so greatly to society and who now need our protection and care.”

“Over the short term, Congress could not have done anything more important to stabilize long-term services and supports, reinforce the caregivers that deliver them, and keep the economic recovery on the right path than the Medicaid decision,” said Larry Minnix, president and chief executive officer of the American Association of Homes and Services for the Aging (AAHSA). “We're especially grateful to our members who contacted their senators and urged them to do the right thing in a bipartisan manner.”

Passage of the measure followed release of a nonpartisan health policy study by the Alliance that suggests that deteriorating Medicaid rate levels across the nation disproportionately impact the ability of African-Americans to sustain ongoing access to quality nursing home care.

Commenting on the research, Rep. Edolphus Towns (D-N.Y.), warned: “Besides stressing why it is essential to pass emergency Medicaid relief, it is important to express the urgent need to head off any systemic trend toward a two-tiered system of nursing facilities-whereby the lowest performing facilities provide care to the poorest and most vulnerable populations in rural and inner-city America. That would be an intolerable development, and discussion and action are warranted to ensure equal access to care for every American.”

The research study, created with analytic support from Avalere Health, a nonpartisan healthcare advisory firm, points out that 40% of all minority skilled nursing facility residents live in facilities with large Medicaid populations. The study illustrates geographical strains, and facilities classified as lower-tier, based on resources and Medicaid resident population, are more prevalent in the South and East, with Louisiana, Mississippi, and Georgia having the highest percentage of resource-poor facilities (36.63%).

Ellen Lukens, a director at Avalere Health and lead author of the study, said that while patient acuity is rising and skilled nursing facility payment rates are falling relative to the cost of care, research increasingly points to the relationship between Medicaid rate levels and quality. “Where rates are relatively high, many nursing homes perform better on key outcome measures, such as hospitalization rates,” she said. “Medicaid rates have implications for residents’ care, particularly in those facilities with high Medicaid concentrations where there is limited opportunity to cross-subsidize with funding from other payers-such as Medicare or private payments. Where there is limited ability to cross-subsidize due to a high concentration of Medicaid residents, facilities may perform more poorly on quality metrics,” she explained.

Meanwhile, AHCA and NCAL are pushing for passage of the Nursing Home Patient and Medicaid Assistance Act of 2010 (H.R. 5457), sponsored by Rep. Kathy Castor (D-Fla.), which seeks to provide a short-term supplemental payment program for nursing facilities with a large Medicaid population.

“This legislation would help to offset a cycle where funding cuts lead to cuts in staffing, which increase individual workloads that then contribute to increased turnover.”

In an issue brief, the organizations pointed out that nearly 64% of nursing home patients nationwide rely on Medicaid to pay for their long term care, and that in many states, Medicaid reimbursement is often less than the actual cost of care-a shortfall that totals $4.6 billion nationwide.

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