Washington, DC – The American Health Care Association (AHCA) expressed disappointment today over the Medicare Payment Advisory Committee's (MedPAC's) March 2008 Report to the Congress: Medicare Payment Policy, which recommends no annual inflation update for skilled nursing Medicare Part A payments that would mean an effective $990 million cut for FY 2009 according to estimates from the Office of Management & Budget (OMB). AHCA warned that MedPAC's ongoing failure to recognize funding interdependence between Medicare and Medicaid could impede the profession's ability to sustain recent quality gains and enhance ongoing quality improvement.
"We are disappointed MedPAC's final recommendation to Congress falls far short, and has completely disregarded vital Medicaid under funding data in assessing whether the skilled nursing facility sector should receive a regular annual inflation adjustment, which is essential to the continued provision of quality care," stated AHCA President and CEO Bruce Yarwood. "Skilled nursing facilities face dramatic cost increases in labor, energy, and technology that are beyond providers' control, and failure to recommend an annual update in the face of rising care costs leaves seniors' current and future care needs in jeopardy."
"The decision by MedPAC to once again disregard vital information and data in assessing whether the skilled nursing facility sector should receive an annual inflation adjustment is unwarranted and unwise," continued Yarwood. "This narrowly focused analysis, when coupled with the nearly $24 billion Medicare cuts over five years in the Administration's proposed FY 2009 budget – including a $4.7 billion administrative proposal to lower Medicare payment rates – does a disservice to those frail, elderly, and vulnerable individuals who receive care in America's nursing homes."
"By once again ignoring Medicaid, MedPAC's analysis and recommendations do not present an accurate picture of the long term care marketplace," said Yarwood. Even though 66 percent of skilled nursing facility patients receive Medicaid benefits, Medicaid funding accounts for only half of skilled nursing facility revenues—the reason special consideration of the relationship between Medicare and Medicaid seems particularly relevant to skilled nursing care.
According to a BDO Seidman/Eljay, LLC study released by AHCA in fall 2007, the Medicaid program reimburses $4.4 billion less than the actual cost of nursing home care for the nation's seniors. This shortfall translates into $13.15 per patient per day less than the cost of care, an amount that has increased 45 percent since 1999.
"America's seniors can not afford MedPAC's short-sighted approach for long term care. Consumers deserve the highest quality care and services across the spectrum of health care settings, and the employees who care for them deserve well-paid, positive work environments." Yarwood concluded.
As the nation’s largest association of long term and post-acute care providers, the American Health Care Association (AHCA) advocates for quality care and services for frail, elderly and disabled Americans. Compassionate and caring employees provide essential care to one million individuals in our 11,000 not-for-profit and proprietary member facilities.