No vacation time for nursing homes this month

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It’s the lazy month of August—and time to get busy. That is, if you’re a nursing home association. Instead of sitting in hammocks idling away the hours, members of the two major lobbying groups will be ratcheting up their efforts to preserve Medicare and Medicaid funding. And it might not be so easy.

The field is up against some pretty tough challenges. The latest came on Friday (on the eve of the start of the House recess, mind you) when the Centers for Medicare & Medicaid Services said it plans to cut Medicare payments to nursing homes by 1.1% in fiscal 2010. This actually represents a combination of a loss of 3.3% as a result of a recalibration in case-mix indexes (CMIs) for the resource utilization group (RUG) system, and a 2.2% gain in the market  basket, or cost of living.

While the net loss next year will be $360 million, nursing homes are concentrating on the total impact stemming from the recalibration. They see it as a reduction of at least $12 billion over 10 years.

But as it turns out, this adjustment could be the least of the industry’s problems. A bill in the House, which congressmen seem hell-bent to pass, is calling for an elimination of the market basket. The bill would cut $33 billion to $44 billion in Medicare payments over the next 10 years. Now that would be difficult news to deliver to members.

Meanwhile, according to American Health Care Association President and CEO Bruce Yarwood, the House bill includes a major section on increasing transparency in the long-term care sector.

And a commission that senators are keen on would essentially relocate the Medicare Payment Advisory Commission (MedPAC) to the executive branch. The commission would be in charge of the market basket, which doesn’t bode well for nursing homes.

And we haven’t even touched on what’s happening to Medicaid at the state level. The recession has turned state budgets upside down and many are looking to Medicaid to rebalance them.

As Yarwood noted on Monday, nursing homes are “looking down the barrel of a Gatling gun.”

Both Yarwood and Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging, believe nursing homes are unfairly being targeted. The Medicare market basket stabilizes the nursing home business model, Minnix said. Medicare pays for the cost of increasingly complex patients and subsidizes Medicaid. Minnix noted that over the years there has been “a gentle person’s agreement” with CMS. If CMS keeps the market basket, nursing homes will take the more complex patients.

“We have kept our end of the bargain,” Minnix said.

Yarwood especially feels that the industry has been wronged with the recalibration stemming from the expansion of RUGs, the categories that determine care payments.

“It’s a forecast error that’s not our error,” he said.

You can bet that both associations plan to hit home these these themes to lawmakers over the next several weeks.

Aaah … August. What hast become of thee?

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.