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Nursing homes sound alarm on Wolf budget

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Long-term care centers and their advocates are blasting Gov. Tom Wolf's proposed state budget for failing to meet the rising costs of senior care.

At issue is the reimbursement paid to long-term care facilities for the cost of caring for residents enrolled in Medicaid. 

According to the Pennsylvania Health Care Association, the state's Medicaid program pays facilities $197.98 per patient per day. But the rate hasn't changed in the last four fiscal years, even as the daily costs for each patient are expected to soar above $250 in 2018.

Representatives for long-term facilities say the failure to raise the reimbursement rate in the most recent budget puts nursing homes in an untenable situation.

The president of the Pennsylvania Health Care Association, Russell McDaid, said the state "should be reinforcing its commitment to this vulnerable population and those providing their care by adequately funding nursing facility and post-acute care."

"Nursing facilities cannot sustain flat funding for a fourth straight year, and increased support for our sickest, frailest elderly residents and those providing their care in this budget is essential," said McDaid.

McDaid cited the continued growth of funds for other programs as an example he hopes the state will follow when it comes to nursing facilities.

"Education, for instance, has seen year-over-year increases in funding since the governor took office," said McDaid. 

The Pennsylvania Department of Human Services, which administers the state Medicaid program, did not respond to requests for comment. 

On average, nursing homes in the commonwealth lose $27.25 per day for each Medicaid recipient they treat, amounting to $9,900 annually for each patient or nearly $1 million annually for a facility with 100 Medicaid recipients.

That shortfall widens as patients and residents grow in numbers and bring with them more intensive care needs. According to the PHCA, as medical advancements increase life expectancy, Americans over 85 are the fastest growing age group in the state.

These changes mean the funding shortfall applies even more pressure to the industry, said Steve Proctor, CEO of Presbyterian Senior Living in Carroll Township. Presbyterian Senior Living operates over 30 locations in Pennsylvania, Maryland, Delaware and Ohio. 

"You don’t have to be a financial wizard to figure out that, over time, it’s an unsustainable pressure," said Proctor.

According to Ron Barth, CEO of nonprofit group LeadingAge PA, nursing facilities make up the shortfall by charging more to patients paying with private insurance or with no insurance at all

"One might ask ‘How do you stay in business?’" he said. "You charge privately paying residents and their families higher rates to make up what the state is supposed to pay. It’s really a stealth health care tax that the governor and the legislator are imposing upon private payers and their families.”

According to PHCA, 26 percent of long-term facility costs are paid for by either private insurance or out of pocket. The average annual cost for a single bedroom at a long-term nursing facility is over $113,000.

Medicaid shortfalls are a problem for long-term care facilities across the country. According to an analysis commissioned by the American Health Care Association, all 50 states underfunded medical assistance payments to long-term care facilities in 2016. New York has the highest margin, with a $52.90 deficit, while Virginia has the lowest, with a shortfall of $0.74.

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Gillian Branstetter

Gillian Branstetter

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

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