Senate healthcare bill would be 'debilitating,' Parkinson says

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Mark Parkinson, AHCA president and CEO
Mark Parkinson, AHCA president and CEO

With some moderate GOP senators on the fence about whether they'll support the Obamacare replacement bill, the American Health Care Association said it's continuing a push to have lawmakers understand its potential devastation to the skilled nursing sector.

“We believe if senators had any idea of the impact they never would have been proposing this,” said Mark Parkinson, AHCA president and CEO, during a media briefing Monday. In presentations with senators and staffers, AHCA is showing how models estimate dramatic cuts to the sector.

“We really think that when we have a chance to sit down [with lawmakers] it's persuasive,” he said. “There's been a realization that there are two significant changes from the House bill that dramatically impact funding for skilled nursing facilities. The long-term impact will be debilitating.”

For one, starting in 2024, the Senate bill changes the Medicaid growth rate to being associated with the CPI urban rate, which is about 2% under what the estimated growth would be for Medicaid costs.

“When you have a 2% differential that compounds year after year ... there is a dramatic underfunding for all Medicaid providers, including nursing homes,” Parkinson said.

Eventually, projections indicate a $600,000 annual gap for a typical nursing home with Medicaid residents, according to AHCA's models. If an average building is making $150,000, those cuts are “much higher than what a building can sustain,” Parkinson noted.

The other problem is a lowered ceiling for provider assessments, which drops what states can assess for a “bed tax” from 6% to 5%. Twenty-eight states are assessing above 5%, which means that while there will be state variance, the average loss per building in state funding due to this provision alone would be $100,000 per year, Parkinson said.

He predicted that if the bill is enacted, providers would start making changes by 2019 to prepare for the dramatic reductions by 2025, which could include staffing cuts.

AHCA and other industry groups have appeared united in their opposition to the bill, with LeadingAge President and CEO Katie Smith Sloan also noting last week the Senate version cuts Medicaid funding “even more deeply” than the House version due to the lower annual growth rate.

Unclear at press time was the impact on lawmakers of the Congressional Budget Office score, which was released Monday. The Senate bill would reduce federal spending by $321 billion by 2026 and cause 22 million Americans to become uninsured within the next decade, according to the CBO analysis.