Wolf is asking for $91 million for nursing homes to offset costs of proposed new staffing rules, but industry says it’s not enough Spotlight PA
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HARRISBURG — Gov. Tom Wolf is asking Pennsylvania lawmakers to spend millions to increase a key reimbursement rate for qualifying nursing homes in the state to offset costs from proposed new regulations that would increase the amount of care required each day.
With the state’s June 30 budget deadline fast approaching, the Democrat wants to allocate $91.25 million to increase the amount of money qualified nursing homes receive for Medicaid residents.
About 11,000 Pennsylvania long-term care residents have died since the COVID-19 pandemic began, a number that has drawn attention to long-standing problems such as dangerously low staffing requirements and outdated regulations.
Groups like the Pennsylvania Health Care Association, which advocates for the state’s long-term care providers, say the state’s low Medicaid reimbursement rate is a major barrier to providing higher levels of care. The current rate, they say, can leave nursing home facilities without funding to increase staff wages or buy supplies for patient care.
The association estimates that Wolf’s investment would increase the daily Medicaid reimbursement rate from the current average of $199.96 to an average of $210 per resident. Neighboring states like Ohio, Maryland, and New Jersey have higher rates.
But while PHCA sees Wolf’s proposal as a welcome first step, the organization argues that it falls far short. The trade group estimates that the regulatory changes would require hiring 10,000 additional employees and $434 million in annual spending. That has led some to dismiss the plan as an unfunded mandate.
According to the Pennsylvania Department of Health, there are 683 nursing homes in the state that supplies a total of about 80,000 residents. This number is expected to increase in the coming years as the state’s population ages 65 and older grows. According to PHCA, approximately 66% of nursing home residents statewide have Medicaid paid for their stay. Medicare accounts for another 13%.
Lawmakers seem to agree that more investment is needed, but how to do that is still a matter of debate. If funding for care homes remains unchanged, advocacy networks, experts and local nurses fear facilities may be ill-equipped to support aging populations.
“We’re at a point where we either have to invest in long-term care in this year’s state budget or the entire system could collapse,” said Zach Shamberg, president and CEO of the Pennsylvania Health Care Association. “That would be devastating for our elderly population.”
Why are refunds important?
Because of the way Medicaid and Medicare funds are allocated, many nursing home facilities seek to accommodate Medicare-funded patients rather than Medicaid-funded ones.
“We made a decision in this country not to cover long-term nursing home care under Medicare,” said David Grabowski, professor of health policy at Harvard Medical School. “So it’s really the only major service that’s passed on to Medicaid today.”
Medicare is a government insurance program that typically covers short-stay patients such as B. Patients in physical therapy or postoperative care.
Medicaid is a government assistance program that — under federal government guidelines — supports low-income people and typically covers long-term patients. The reimbursement rate is the amount each nursing home receives from the state government on behalf of the eligible patient.
According to Grabowski, Pennsylvania’s low Medicaid reimbursement encourages nursing homes to seek out Medicare patients who plan to stay short, rather than admit Medicaid patients who need longer stays.
This dynamic, he continued, makes the federal government a “very generous payer,” and this windfall allows care facilities to typically earn double-digit margins on short-stay patients. Meanwhile, Medicaid patients typically result in negative margins for facilities, he said, creating a gap between the cost of care for residents and the amount of federal funding.
According to a study conducted in February for LeadingAge PAa trade association representing about 380 providers in the state that care for older adults, the daily gap between what nursing homes received and what they spent for Medicaid residents averaged $86.26 per resident.
Grabowski said increasing the Medicaid reimbursement rate could alleviate some of the problems. Lobbyists and advocates for the Pennsylvania industry call for an investment of $294 millioninstead of the $91.25 million proposed by Wolf.
Grabowski argues that any investment in the industry should also include some form of accountability to ensure funds are improving quality and not being misused.
“I think we need to rethink what it means to live and work in a nursing home,” Grabowski said. “Because the current economic model is definitely broken.”
More money, more control
Wolf’s $91.25 million pitch comes with proposed regulations that would require nursing homes to offer residents more hours of direct care.
Speakers for Republicans in the House and Senate confirmed that assemblies will consider the proposal and continue to invest in nursing homes, but gave no details.
In 2020, Spotlight PA reported on long-criticized staffing and training regulations exposed by the pandemic. Shamberg said the PHCA has found that nursing homes are facing the same problems today, in addition to rising costs across the country.
Since the pandemic began, the state has allocated nearly $500 million to nursing homes through Acts 24 of 2020 and 2021. These funds should help ease the burden of additional costs related to COVID-19. But as one-time infusions, PHCA said the money doesn’t fill the gap in Medicaid’s reimbursement rates and therefore doesn’t increase staffing.
Karen Hipple, a licensed practical nurse at the Oil City Healthcare and Rehabilitation Center in Venango County, said staffing ratios are too high — with one certified nursing assistant tending to 20 to 30 patients at facilities where she has worked and visited . She said hiring more staff must be a top priority, which requires more funding.
Hipple blames the shortage on the low wages faced by many nursing home workers. Corresponding US Bureau of Labor Statistics datathe average wage for a nurse is $16.44 per hour.
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