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Pa. skilled nursing facilities in jeopardy because of Medicaid shortfalls

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Profit margins continue to erode at Pennsylvania's freestanding skilled nursing facilities, according to a study released Friday.

The study, from Washington, D.C.-based Avalere Health and released by the Pennsylvania Health Care Association, showed profit margins for the facilities decreased 63 percent from fiscal year 2007 to fiscal year 2012, from 3.2 percent to 1.2 percent.

That has left many skilled nursing facilities teetering on the brink of bankruptcy, according to experts assembled for a press conference Friday.

"Pennsylvania's skilled nursing facilities are on a financially unsustainable path. That's the bottom line," said Stuart H. Shapiro, president and CEO of the Pennsylvania Health Care Association. "The money simply isn't there to provide the care our citizens need."

Rising medical costs and Medicaid reimbursement rates below what the cost for care actually is causes the problem, according to the medical professionals at the press conference.

While the profit margin for all facilities in the state is small at 1.2 percent, facilities with more than 75 percent of their patients using Medicaid for their payment method have a profit margin of 0.3 percent.

In another report released Friday studying the Medicaid shortfall, a skilled nursing facility loses $25.92 per day on a patient that uses Medicaid as payment, according to 2013 projections. The Pennsylvania Health Care Association also released that report.

That's about $9,500 a year per patient, which equates to about $470 million in non-reimbursed, allowable Medicaid costs in Pennsylvania, according to the study.

Because of the Medicaid reimbursement shortfall, the association is asking for $16 million in additional state budget funding to help fund Medicaid reimbursements.

While Shapiro wouldn't specifically say which state programs should be cut to fund the extra $16 million — which he said would trigger another $17 million to $18 million in federal funding — he said a $29.3 billion state budget should be able to find the money.

State Rep. Glen Grell of Cumberland County said he supports the additional $16 million in funding, saying it "should not be that difficult" to find it in the budget.

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