Report: President's budget will cut state Medicaid nursing home funds

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President Bush's proposed FY 2007 federal budget will cut state Medicaid funds used to improve nursing home care by $1.58 billion, according to a new report.

Researchers for BDO Seidman and the American Health Care Association said they found staggering evidence that the president's proposal to limit the so-called provider tax assessment to 3% would negatively impact elderly nursing home residents in most states. That is half of the current 6% limit allowed to procure matching federal funds.

Nationwide, providers currently benefiting from the targeted tax revenues would lose an average of $6.53 per resident day.

Pennsylvania, California, New York and Michigan are among the states that would lose the most overall funding, according to the joint AHCA and BDO Seidman analysis. Pennsylvania would stand to lose $167 million ($8.18 per resident day), California $125 million ($5.43 per resident day) and New York $114.5 million ($3.82 per resident day), according to preliminary estimates. Mississippi and Arkansas would be among the biggest per-resident-day losers at $15.43 per resident day each.

Since the 1980's, 33 states and the District of Columbia received waivers from the Centers for Medicare & Medicaid Services to assess a quality fee on state long-term care providers, also characterized as a "provider tax," to generate additional federal revenue and help fund states' share of Medicaid program costs.
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