Washington, DC – In testimony before the House Energy and Commerce Health Subcommittee today, the American Health Care Association (AHCA) and the National Center for Assisted Living (NCAL) urged swift congressional support for a new bipartisan bill sponsored by U.S. Representatives John Dingell (D-MI) and Tim Murphy (R-PA) that would impose a one-year moratorium – essentially halting implementation – of seven harmful Medicaid regulations issued by the Centers for Medicare & Medicaid Services (CMS).
Dr. Stuart Shapiro, President and CEO of the Pennsylvania Health Care Association (PHCA), testified on behalf of the long term care profession, and stated the Bush Administration’s proposed reforms of Medicaid are, “a unilateral attempt by the executive branch to cut Medicaid funding without adequate congressional oversight, without a complete understanding about how these changes would impact our most vulnerable seniors, and without the public policy transparency clearly called for considering the sweeping nature of the proposed changes.”
“The proposed Medicaid regulations, which this legislation delays, are hard-hearted, short-sighted, and contrary to the needs and interests of our nation’s seniors and persons with disabilities,” further remarked Shapiro. “These individuals have paid ‘their dues’ to America, they should be at the front of the line for resources – not shoved to the back.”
Dr. Shapiro, citing the fact governors nationwide are considering belt-tightening measures to balance their budgets in the face of declining economic conditions, said the proposed Medicaid changes “are completely antithetical and divorced from the budgetary and economic realities we face in Harrisburg and in state capitols coast to coast.” He cited a recent study from BDO Seidman showing that nursing homes receive an average of $13.15 less than the cost of care for every day of care provided to a Medicaid patient – resulting in a facility operating loss of $4.4 billion nationwide. Since 1999, the funding gap has grown by 45 percent.
In Pennsylvania alone, he testified, Medicaid already underfunds the cost of that care by $11.91 per patient, per day. “This is not just a one year shortfall, Mr. Chairman – this shortfall has occurred every year for the last five years. These funding shortfalls have a major impact on the front lines of care in terms of negatively impacting staffing, jeopardizing intra-facility quality improvement efforts, and even costing the jobs of the very staff that make a key difference in quality outcomes. This crisis is far more than an inconsequential gap between care costs and reimbursement levels – it is a widening chasm that threatens patients, and undermines providers’ ability to sustain hard won quality gains on behalf of our patients.”
The PHCA President and CEO said that in the context of the economic downturn and concomitant strain on state budgets, the profession worries the new regulations will constrict seniors’ ability to access key Medicaid programs and resources, and that the loss of federal Medicaid funds will merely shift costs to the states and disrupt existing systems of care for fragile populations.
“We in Pennsylvania are grateful to Chairman Dingell and Congressman Tim Murphy for pursuing a bipartisan bill – The Protecting the Medicaid Safety Net Act of 2008 (H.R. 5613). It is simply common sense, and good public policy to accurately assess the ultimate impact of these regulations on the people we serve in the Medicaid program—frail seniors and people with disabilities. The Dingell-Murphy legislation is the right bill, at the right time, asking the right questions – and its passage is among our profession’s major priorities for the year.”
Dr. Shapiro outlined how four of the seven proposed Medicaid regulations would negatively impact seniors:
Limitations on Case Management Services – The proposed changes would shorten transition planning time available for seniors and people with disabilities that need help transitioning from a facility to the community. When an individual is ready to leave the nursing home, he pointed out, they may no longer own a home or have accessible appropriate housing or have transportation to their doctor. Reasonable time is needed to help put these services in place. The goal is to have a successful transition from facility to home for the fragile senior or person with a disability. The regulation does not stop these services from being provided, but appears to constrict funds to pay for these services.
The Cost Limits for Public Providers (Intergovernmental Transfer) – The proposed regulation would reduce much-needed Medicaid payments to county nursing homes and other public providers, and also restrict states’ use of this legal mechanism to generate funding for states’ share of Medicaid costs. Moreover, Dr. Shapiro said, it would significantly affect states that are scrambling to replace funds previously committed to long term care. Data collected by AHCA/NCAL finds thirteen states utilize IGT funds for nursing home costs – and data collected from CMS documents shows that as many as 30 states use funds generated from IGTs to help fund long term care costs.
Testified Dr. Shapiro: “In the Commonwealth of Pennsylvania, we continue to rely on an IGT to help fund long term care. Because of this regulation, the Commonwealth has a hole of $184 million. That is $184 million less that the state will have to fund care – and that means no increase to help fund more CNAs, sustain intra-facility quality improvement efforts, and invest in the added capacity needed to care for a growing influx of seniors with complex care needs. It is not fair to seniors and people with disabilities who rely on this care to have it cut through a regulation with no provision for how their care will otherwise be funded.”
The Provider Tax Regulation – This regulation could alter states’ ability to assess a provider tax – sometimes referred to as a quality fee – to raise additional, critical funds for patient care. More than 30 states currently have obtained approval from the Centers for Medicare and Medicaid (CMS) to use the provider tax program. Long term care is often the largest piece of a state’s Medicaid budget pie and governors and legislatures struggle to adequately fund it. AHCA concurs the quality fee is not a long term funding solution, and supports major reform of the long term care funding system with a focus on individuals planning for their long term care needs. Yet, until the long term care system is reformed and properly funded, Dr. Shapiro continued, “Our profession supports keeping the quality fee program in place to generate important funding to pay for long term care for seniors and people with disabilities.”
Continued Dr. Shapiro: “In Pennsylvania, we depend on this tax. It is helping cushion the “double whammy” of federal cuts in Medicare and Medicaid as well as the cuts being proposed by our own Governor. If it were to be eliminated, there would be a budget hole of almost $400 million dollars.”
Rehabilitative Services Regulation – AHCA is concerned that this regulation’s reduction in expenditures could significantly impact services to individuals with developmental disabilities (DD). Specifically, individuals who may be receiving essential services, such as vocational training to improve physical and mental functioning, under a state plan’s rehabilitation option, might lose those vital services simply because they do not match the proposed rule’s definition of “rehabilitation.”
The PHCA President and CEO told the Energy and Commerce health panel that the long term care profession embraces three key principles in the context of ongoing Medicaid reform:
- Finding future budget savings should not come at the expense of today’s quality long term care provided for poor and frail elderly;
- Particularly in difficult economic times, states are desperate for supplementary Medicaid funding to meet the needs of their most vulnerable citizens, and must retain latitude in regard to how they ensure care quality and access are maintained;
- Instead of focusing on the problems with legal mechanisms that have been utilized for close to two decades, we should focus on why these dollars are needed, and how we can meet this financial challenge.
“We appreciate the leadership shown by Chairman Dingell and Representative Murphy in proposing this needed one-year moratorium, and we look forward to working with this Committee and other leaders in Congress to forge more comprehensive long term care financing reforms for Medicaid as well as our nation’s entire long term care structure,” Dr. Shapiro concluded.
The American Health Care Association and National Center for Assisted Living (NCAL) represent nearly 11,000 non-profit and proprietary facilities dedicated to continuous improvement in the delivery of professional and compassionate care provided daily by millions of caring employees to 1.5 million of our nation's frail, elderly and disabled citizens who live in nursing facilities, assisted living residences, subacute centers and homes for persons with mental retardation and developmental disabilities. For more information, please visit www.ahca.org or www.ncal.org.