WASHINGTON, DC – As lawmakers in Congress move to the second phase of their negotiated deal to raise the federal debt ceiling, the American Health Care Association today stated that an automatic two percent cut to Medicare as originally proposed will disproportionately impact elderly residents and the providers who care for them.

"There comes a point in any sector when additional cuts can no longer be shifted, absorbed, or passed through to others. For our profession, that tipping point is right now," said Mark Parkinson, President & CEO of the American Health Care Association/National Center for Assisted Living.

Pursuant to the debt ceiling legislation President Obama signed into law earlier this week, the measure’s provisions call for a new congressional committee to identify a further $1.5 trillion in deficit reduction over the next 10 years. If the 12-member panel fails to reach agreement, automatic across-the-board spending cuts will be triggered upwards of $1.2 trillion. While Medicaid and Social Security are exempt from the triggers, Medicare is not. The mandatory cuts would include a two percent reduction in payments to Medicare providers beginning in 2013.

The Medicare trigger has been billed as a benign way to control health care spending without directly impacting seniors and other beneficiaries.

However, skilled nursing facilities were handed last week an 11.1% reduction through a CMS rule on the SNF prospective payment system. An additional two percent cut could mean as much as a $50,000 reduction in funds available to care for patients at the average nursing home. For a typical 100-bed facility where 70% of its costs are staff-related, that could result in the termination of two direct-care workers1.

"These cuts don’t occur in a vacuum," continued Parkinson. "We hope Congress and the administration understand this latest proposal comes on the heels of several other deep reductions in provider funding – cuts that have taken their toll on our sector."

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1Figures derived from data in the 2011-2012 Nursing Home Salary and Benefits Report compiled by the Hospital & Healthcare Compensation Service. According to this report, the average CNA wage is $11.52 per hour. At 2,088 hours per year (8 hours per day, 261 days per year), the average wage is $24,053.76.