As states cut Medicaid funds, nursing home group proposes bad debt fix

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Forty states have either frozen or cut Medicaid-financed nursing home care for seniors between 2009 and 2011, a new survey has found.

In its 50-state survey, analysts from Avalere Health found that almost half of states lowered skilled nursing facility payment rates during at least one of the three fiscal years during this period, while 17 states froze rates over this time.

"These findings speak to the financial pressures nursing facilities face on the Medicaid front,” said Emil Parker, lead author of the Avalere study. Many SNFs rely on Medicare funding to offset Medicaid-related losses.

To combat state and federal government cuts, the American Health Care Association has issued a proposal aimed at easing the fiscal burden imposed on SNFs. The industry stands to take a $2 billion cut due to the reduction of so-called “bad debt,” between 2014 and 2021.

AHCA has taken to Capitol Hill with its plan, which involves offering SNFs incentives for preventing expensive hospital readmissions. Under AHCA's plan, nursing homes would agree to meet hospital readmission reduction goals. If participating facilities fail to meet these goals, they would face Medicare rate cuts to make up the difference. Nursing home advocates such as Alan Rosenbloom also have said facilities need to bear more responsibility for reducing re-admissions to hospitals.

To read more about AHCA's proposal, click here and here

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