Google Plus Facebook LinkedIn Twitter Vimeo RSS

Nursing homes brace for workers' comp rate increase

By ,
Nursing homes are bracing for a rate increase to worker's compensation plans after a sweeping Supreme Court decision last June.
Nursing homes are bracing for a rate increase to worker's compensation plans after a sweeping Supreme Court decision last June. - (Photo / )

Already suffering from low reimbursement, Pennsylvania nursing homes are bracing for rate increases that will force them to spend more on workers' compensation premiums.

Nursing homes raise concerns

The state Insurance Department approved an increase to premiums for worker’s compensation insurance of 6.06 percent at the end of December.

Nursing homes - which face a disproportionate number of worker’s compensation claims - are concerned the rate increase will only put more weight on a system industry advocates say is underfunded and overworked.

In a statement, W. Russell McDaid, president of the Harrisburg-based Pennsylvania Health Care Association, called the rate increase "an unprecedented action that will lead to significant cost increases for Pennsylvania’s skilled nursing facilities, assisted living residences and personal care homes."

Citing a 2016 study by the American Health Care Association, McDaid claimed Medicare and Medicaid payments already cut nursing homes short at an average of $10,000 annually for every Medical Assistance recipient in their care. The workers' compensation increase, he argued, will only exacerbate the problem.

"Skilled nursing facilities continue to be asked to do more with less," McDaid continued. "These facilities, which care for our most vulnerable populations, cannot invest in necessary capital improvements or advanced technology that would enhance care, nor can they pay competitive wages that would increase staff retention, which is so vital to high-quality care."

Employees of nursing homes and independent living centers face relatively high rates of onsite injury, mostly due to lifting and transporting of patients.

According to data gathered by the Bureau of Labor Statistics in 2015, the Lost Work Day Injury and Illness (LWDII) rate for nursing homes and residential care facilities is 4.2 work hours for every 100, compared to an average of 1.7 for all private industry. This puts nursing homes ahead of mining and construction among industries known for high risk of injury.

Rate Trickle Down

According to the Pennsylvania Compensation Ratings Bureau, a state Supreme Court decision last June made a rate increase necessary, as the ruling struck down the use of impairment rating evaluations. The bureau filed a proposal for a 6.06 percent increase in loss costs to account for the decision. It will be the first increase to the loss costs rate in the state since premiums began a steady decline in 2011. 

According to industry trade group LeadingAge PA, the change will disproportionately effect nonprofit nursing homes and independent living centers already weighed down by a shortfall in reimbursements from the state's Medical Assistance program, the state's Medicaid program for low-income Pennsylvanians.

In responding in October to the bureau's proposal, LeadingAgePA argued the rate increase would put further pressure on "increasing costs and stagnant reimbursement levels" faced by its members.

Citing underfunding of nursing homes and independent living centers by the state's medical assistance program, LeadingAge said "the proposed worker's compensation increase will be difficult to withstand, especially for those facilities that have a higher proportion of residents that depend on [medical assistance]."

LeadingAge requested a year for nursing homes to prepare for the rate increase, which the bureau had initially set to take effect for Nov. 1 of last year. But on Dec. 27, the increase was approved by the Pennsylvania Insurance Department with an effective date of Feb. 1.

The increase applies to policies that are renewed or newly taken out after the effective date.

Also Popular on CPBJ

Gillian Branstetter

Gillian Branstetter

Gillian Branstetter covers health care news for the Central Penn Business Journal. Email her at gbranstetter@cpbj.com.

Leave a Comment

test

Please note: All comments will be reviewed and may take up to 24 hours to appear on the site.

Post Comment
View Comment Policy

Comments

close