Posts Tagged ‘skilled nursing’

Nevada Skilled Nursing Industry Faces Ongoing Economic Challenges After Legislative Session

By Sean Whaley | 4:53 pm July 21st, 2011

Editor’s note: The information in paragraph four of this story is incomplete. While there has not been a state general fund-supported rate increase for the skilled nursing industry in the past decade, rate increases have been implemented. Skilled nursing rates have increased from about $122 per day in fiscal year 2003 to $189 per day in fiscal year 2011, according to the state Department of Health and Human Services. The increases have been funded through an industry provider tax.

CARSON CITY – Nevada’s skilled nursing homes avoided the deepest cuts initially proposed by the Sandoval administration to pay for serving Medicaid clients, but the reimbursement rate is still inadequate to cover actual costs, an industry official said today.

The industry is also concerned that any resolution to the federal deficit discussions under way in Washington, DC, could further exacerbate the economic challenges facing it, said Daniel Mathis, chief executive officer of the Nevada Health Care Association.

Gov. Brian Sandoval originally proposed a cut in the reimbursement rate of $20 per Medicaid patient per day for the state’s four dozen free-standing skilled nursing facilities, but the final budget deal resulted in only a $5 per day reduction. Even so, Mathis said the reimbursement rate has now grown to about $19 a day below actual cost.

“We’re happy that it ended at $5, not $20, but still, for an industry that hasn’t had a rate increase for Medicaid in 10 years, this is going to have some negative impact,” he said.

Evergreen Carson City Health & Rehabilitation Center. / Photo: Sean Whaley, Nevada News Bureau

At the $20 per day cut initially proposed by Sandoval, the industry estimated that as many as five facilities would close, reducing access to skilled nursing beds by Nevada’s elderly.

Charles Duarte, administrator of the Nevada Division of Health Care Financing and Policy, which manages the state Medicaid program, said 34 nursing facilities are appealing their reimbursement rates and so he could not comment on their concerns.

Mathis said the industry is only expecting further cuts as a result of any agreement at the national level to address the federal deficit. Because of the uncertainty over Medicare and Medicaid funding at the federal level, Nevada’s skilled nursing facility operators are in a wait and see mode as to what they will do in response, he said.

“Until providers know exactly what the rate is going to be I doubt there (are) going to be any announcements or change of programming right now,” Mathis said.

The federal debt discussions refer to reductions in entitlement programs, but that translates to cuts in services to the elderly and disabled, he said.

Duarte said the federal discussions have included a possible reduction in federal reimbursement rates through a provider tax levied in Nevada on the skilled nursing facilities, but the indications were it would not happen right away.

“The discussion I’ve heard is that that won’t happen for perhaps as long as five years,” he said. “That it will start being ratcheted down. But of course we’re not privy to the latest information coming out of Washington, so there may be other things that are being discussed that have more dramatic and immediate impacts on not just nursing homes but provider payments.”

One of those is a potential change in the Federal Medical Assistance Percentages (FMAP) that provides matching funds for state Medicaid programs. The match rate for each state is based on average household income.

If the rate is adjusted it will be to achieve budget savings at the federal level, which would likely result in more program costs being passed onto the states, Duarte said.

The National Governor’s Association has sent a letter expressing concerns to the president and Congress that costs will be shifted to the states as the result of any Medicaid cuts that are part of a deficit deal.

Audio clips:

Daniel Mathis, chief executive officer of the Nevada Health Care Association, says the smaller Medicaid reimbursement cut will still have an impact:

072111Mathis1 :16 some negative impact.”

Mathis says Nevada skilled nursing facilities are waiting to see what a federal deficit deal will mean to the industry:

072111Mathis2 :10 programming right now.”

Charles Duarte, administrator of the Nevada Division of Health Care Financing and Policy, says some federal cuts that are part of a deficit deal may not take effect right away:

072111Duarte1 :24 but provider payments.”

Duarte says there is a concern that a federal deficit deal will pass costs on to the states:

072111Duarte2 :10 ill afford it.”

 

Democrats Vote To Restore $90 Million To Medicaid Budget

By Andrew Doughman | 12:21 pm May 14th, 2011

CARSON CITY – Democrats today voted to reject Gov. Brian Sandoval’s proposed budget cuts to Medicaid programs this morning.

The governor would have saved about $90 million in his budget through the reductions. Republicans on the Legislature’s money committees voted to cut the Medicaid budget in line with Sandoval’s recommendations.

The Medicaid funding would help reimburse hospitals and their staff for caring for Medicaid patients.

The money also would help fund adult day care, eyeglasses for poor adults, dental and ambulance services, as well as reimbursement rates for skilled nursing homes.

Democrats called the cuts unacceptable and argued that all Nevadans end up paying higher insurance premiums when hospitals are not reimbursed for patients on Medicaid.

“We are at the tipping point,” said Sen. Sheila Leslie, D-Reno. “We are going to see services close that affect the entire population … This isn’t just about poor people anymore … we are jeopardizing the health care system for everybody.”

The cuts were personal for Senate Majority Leader Steven Horsford, D-Las Vegas. In an emotional speech before legislative money committees this morning, he said his grandmother had lived in a nursing home for 25 years. He said he has personally seen the effects of inadequate funding at some nursing homes.

“There’s a reason these rates have to be maintained at a certain level because if they drop below, the adequacy of care gets compromised,” Horsford said.

Sandoval had originally proposed reducing skilled nursing home hourly rates by $20 and later reduced that cut from $20 to $15. Some have questioned whether the cuts would be in violation of federal law.

The Nevada Health Care Association, which represents the skilled nursing industry, has also objected to the reductions and suggested that some facilities could close with the Medicaid reimbursement cuts.

“We have repeatedly voiced our concern that physicians (and other providers) simply will not be able to afford the costs associated with providing care at the reduced rates and Medicaid patients face growing accessibility problems,” said Brian Callister, president of the Nevada State Medical Association, in an earlier statement.

Representatives from the state’s Department of Health and Human Services have said that the budget reductions would not violate federal law.

Some questioned whether eliminating the reductions was possible with the money that state currently has.

“If we completely reject this, we’re just continuing to add to a deficit that, at this point in time, we don’t have the revenue to support,” said Assemblyman Randy Kirner, R-Reno.

Although the Democrats’ decisions created a hole in the governor’s budget, they have introduced a tax plan that would pay for these services.

The plan includes extending taxes passed during 2009 and scheduled to end July 1 of this year. Such an extension could net the state $626 million during the next two years.

An additional proposed 1 percent sales tax on services and 0.8 percent business “margin tax” would get the Democrats to about a $7 billion budget, which is $920 million more than the governor recommends the state spend.

Democrats have argued the tax increases represent the best way to avoid harmful budget cuts to education and social services.

Sandoval has repeatedly said he will not support a tax increase. To pass the tax increase, Democrats would need to vote as a group as well convince five Republicans to vote with them to override a likely veto from Sandoval.

The votes taken today to avoid the cuts are not binding. The Legislature can still alter which programs are funded and which are not.

 

 

 

Legal Analysis Says Medicaid Rate Cuts To Nursing Home Industry Would Violate Federal Law

By Sean Whaley | 10:52 am March 23rd, 2011

CARSON CITY – A legal analysis provided to the skilled nursing home industry regarding a proposed Medicaid rate reduction to cover the cost of caring for Nevada’s seniors says the cuts would be a violation of federal law.

The analysis says the proposed reductions of $20 per Medicaid resident per day are being proposed in Gov. Brian Sandoval’s budget, “purely as a means to alleviate the budgetary crisis.”

Because Nevada has not performed the analysis required under federal law before such rates can be reduced, the cuts would be in violation of federal law in the jurisdiction of the 9th U.S. Court of Appeals, which includes Nevada, the analysis says.

“Therefore, the rate reductions, if implemented, will be a violation of federal law and will leave Nevada vulnerable to a series of costly legal challenges, which could well result in imposition of an injunction against the rate reductions, given the current judicial precedents,” the analysis says.

“The unlawful rate changes could also affect federal funding of Nevada’s Medicaid program,” the analysis says. “Therefore, the legislators must find alternate means of balancing the budget that do not include reducing rates to Medicaid providers.”

The memo from the legal firm of Lionel, Sawyer & Collins to Charles Perry of the Nevada Health Care Association, the organization that represents Nevada’s skilled nursing home industry, was provided to the Senate Finance Committee.

The committee took testimony on Senate Bill 54, which would change state law regarding a nursing facility provider tax to allow for the Medicaid rate reductions. The panel did not take action on the bill, which is being sought by the Sandoval administration.

The tax was implemented in 2003 with the support of the industry to improve the quality of care provided to Medicaid recipients living in skilled nursing facilities. It was intended to provide funding over and above the support in the general fund budget. SB54 would eliminate this requirement and save the state general fund about $10 million.

The panel was also told by nursing facility representatives that there are now two homes that are looking at closing if the reduction is approved by the Legislature. Initially the industry said as many as five facilities might close.

Charles Duarte, administrator of the Division of Health Care Financing and Policy, testified in support of the bill. But he acknowledged he has concerns that if the reimbursement rates are reduced, more issues with the quality of care provided to nursing home residents could arise.

Duarte said he is aware of the suggestion by industry representatives that some facilities could close if the reductions take effect, but that the agency would have to wait and see what the effects would be.

Sen. Sheila Leslie, D-Reno, said if closures do occur, those affected will be vulnerable elderly people and their families.

“It bears watching,” she said.

Analysis Suggests Big Financial Impact To Nursing Homes If Medicaid Reimbursements Are Cut

By Sean Whaley | 2:30 am March 23rd, 2011

CARSON CITY – An analysis of a cut in Medicaid payments to skilled nursing facilities proposed by Gov. Brian Sandoval paints a sobering picture for the industry and its future in Nevada.

The analysis was performed by Eljay LLC using cost report information from 32 of Nevada’s skilled nursing facilities. It evaluated what the loss of $20 per Medicaid patient per day residing in a skilled nursing home would mean. The company provides consulting services on design, redesign and implementation of Medicaid payment systems for nursing homes.

The conclusion: the $20 rate reduction would equate to an average loss of almost $500,000 for each of the facilities used in the analysis.

“Three facilities would have annual revenue reductions exceeding $1 million,” it says. “After the rate reduction, the average shortfall between Medicaid allowable costs and the rates paid would be almost $40 per patient day.

“For a 100-bed nursing home with 60 Medicaid patients, the average annual loss for caring for Medicaid patients would now be $870,000,” the analysis says.

It says a $500,000 reduction in Medicaid payments is the equivalent of about 15 percent of a 100-bed facility’s workforce.

“As a result, patient care would likely be seriously jeopardized and some facilities would likely have to close,” the Eljay analysis says.

The analysis is dated November 2010 but is based on the reductions in Sandoval’s budget.

The reduction in reimbursement is one of several Medicaid rate reductions proposed for many types of medical providers as a way to help balance Sandoval’s proposed $5.8 billion general fund budget.

The skilled nursing reductions would save nearly $10 million over two years. All the Medicaid rate reductions to all medical providers would save nearly $60 million in total over the same period.

The information in the analysis could come up at a hearing before the Senate Finance Committee this morning. The panel is set to take up Senate Bill 54 dealing with a tax nursing home operators agreed to impose on their industry several years ago to improve the quality of care to residents at their facilities.

The Department of Health and Human Resources has requested changes to the Fund to Increase the Quality of Nursing Care in order to implement the rate reduction.

Renny Ashleman, a lobbyist representing the Nevada Health Care Association, which represents the skilled nursing industry, said the language in the law has to be changed because the tax, which is matched with federal funds, was intended to augment funding for the facilities.

The proposed rate reduction would save the state general fund about $10 million, but the actual loss to the facilities is about $23 million when matching federal funds are included, he said. Ironically, the $23 million loss is just about what the tax generated to the facilities, Ashleman said.

In testimony in support of the bill before the Senate Health and Human Services Committee in February, Charles Duarte, administrator of the Division of Health Care Financing and Policy, said the reductions in Medicaid reimbursements are part of a budget that attempts to preserve essential services to Medicaid recipients. Any proposal to restore the cuts would have to include equivalent savings from other areas of the budget, he said.

Officials with Nevada’s skilled nursing facility industry have said the reduction in Medicaid reimbursement would lead to the closure of as many as five facilities, reducing the number of beds for the elderly needing their services by 700.