This new budget doesn't pass the smell test

John O'Connor
John O'Connor

For many operators, the new federal budget is beginning to smell like a rotten onion. And as more of its layers get exposed, the stench keeps getting worse.

Particularly odious is the subtle but stinging way the new budget will take more money out of your hide via higher fines — especially if your facility has a high Medicaid census.

Operators already face potential daily civil monetary penalties of up to $10,000. For those accused of being noncompliant going forward, this amount might soon seem like chump change.

You can thank Section 701 of the two-year budget deal for these dramatically escalating fines. For it is in this tucked away part of the law that you will find a proviso calling on the Centers for Medicare & Medicaid Services (as well as other federal agencies) to increase fines, including False Claims Act penalties, in ways that adjust for inflation. A first sizable increase will be put into effect by August 1, with subsequent adjustments to be made in the years that follow.

The bottom line is that daily fines levied against operators charged with regulatory violations might soon hit or surpass $20,000. False Claims Act fines could see a 40% increase, according to analysts.

To better understand what amounts to a dramatic rate hike, consider why the two-year deal was constructed as it was. Essentially, the inflationary adjustments were enacted so the government could spend additional money on more, ahem, deserving causes. So congratulations long-term care providers. You are once again carrying somebody else's water.

On the bright side, it might be argued that long-term care operators are helping the country. After all, every extra dollar you kick into the Treasury is one fewer dollar that will have to be found someplace else. Perhaps. But I'm guessing this is not the kind of helpful patriotism too many operators would like to build on.

It has been said that skilled care operators have a complicated relationship with the federal government.

True, few facilities could remain in business if it were not for the Medicare and Medicaid payments they receive. However, that same government seems to occasionally take a sick pleasure in making life miserable for operators. These conflicting realities help explain why so many people in this field seem to view their largest source of revenue with a suspicion that borders on contempt.

Yes, Uncle Sam may be the hand that feeds. But all too often, it's also the hand getting ready to deliver a good slap.

John O'Connor is McKnight's Editorial Director.

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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 Emily Mongan.

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