Nursing homes in almost every state are in a fight for survival. To a large extent this was true before COVID-19 reared its ugly head in our nation’s long-term care facilities. Unfortunately, Washington State was ground zero when in late February some of the first cases in nursing homes were detected at a facility near Seattle. The story if Washington State is not unlike many states when it comes to the challenges of caring for our elderly and retaining sufficient and well-trained staff.
Underfunded providers
Washington State nursing home providers are underfunded to the tune of around $116 million. That is a fact as determined by the Department of Social and Health Services and not the opinion of this author. It is no wonder that when COVID-19 began its stealthy march through America that nursing homes were hard hit. Life Care Center of Kirkland, now well-known as ground zero of COVID-19 for long-term care providers, did not even know what hit them. Washington State, through inadequate funding, left every nursing home ill-equipped to deal with a pandemic. When a system is struggling to survive, it is clearly not at its fighting best.
Nursing homes across American have been ravaged for years by inadequate state funding lead by ostrich style legislative practices. If you put your head in the sand you can pretend not to notice providers closing their doors due to funding challenges. In Washington State, a total of over 20 nursing homes closed in the past three years and more are closing in 2020. Legislative leadership, in complicity with the governor’s office, left the long-term care profession here in Washington State chronically underfunded and, therefore, easy targets for COVID-19’s seemingly higher transmission rate coupled with few initial symptoms. Unfortunately, Washington State seems to follow the rule and is by no means the exception when it comes to why nursing homes are closing.
In February 2020 when the pandemic hit, nursing homes were paid based on costs from 2016. In 2016 the minimum wage was $9.47 per hour. In February 2020 the minimum wage was $13.50. While the majority of workers are paid above minimum wage, a 42.5% increase in minimum wage necessitates an across-the-board wage increase — a concept known as wage compression. Every business owner and worker understands this concept except perhaps those elected to statewide office. The end result is that the cost of operation increased dramatically between 2016 and 2020 with no corresponding increase in provider reimbursement.
In February 2020 as COVID 19 hit, nursing homes were pathetically underfunded. That was unforgiveable, and the blame clearly rests at the feet of the state legislature and governor’s office. People got sick and many died prematurely as a result of this failure in leadership and chronic underfunding.
A brief respite
Since February 2020 as providers worked with the state in an effort to redirect CARES Act FMAP [Federal Medical Assistance Percentage] funding to these providers, the situation improved. Providers were able to afford increased staffing, hazard pay in an effort to retain workers, and personal protective equipment in order to protect their staff. In fact, the additional $29 per resident day, or roughly $42,000 per provider per month, was lifesaving. Care improved. Infection rates decreased. Fewer people died.
Now, what was giveth is taken away. While nursing homes saw their daily rates rebased to 2018 costs (still two years behind actual costs), the state budget writers removed the $29 add-on, leaving nursing homes once again seriously underfunded beginning July 1, 2020. The federal FMAP enhancement has not gone away and the threat of COVID 19 seems worse than ever. I know many of you think it is just like the flu or that it only impacts the younger population or that it is all a political hoax.
There are two realities. First, the number of cases is rising, and second, elderly people infected with COVID-19 have a much higher death rate. If you do not have COVID-19 you are a spreader. During World War II our nation placed every effort and spared no expense in winning that war. We are now faced with a different war — a war we can win, but we must give our caregivers and our elderly the necessary tools they need to win. The governor in each state needs to sit down with their budget writers, sharpen their pencils and solve this problem. A good first step for each governor and legislature to immediately redirect Enhanced FMAP money to nursing homes. It is a matter of survival.
Bill Ulrich has more than 30 years of experience in the long-term care profession as a financial and Medicare consultant. Prior to founding Consolidated Billing Services Inc. [CBSI] in 1998, Bill worked for two large multinational long-term care providers. Over 30 years, Bill developed the technical acumen and expertise in operational reimbursement that made him a sought-after health care consultant and speaker.
