For nearly a year and half, Texas nursing home operators have been waiting for the moment before them: the early days of the most promising legislative session in nearly a decade.
What happens to Medicaid rates there between now and the end of May, when lawmakers will leave Austin until 2025, could either save or sink skilled nursing providers. But what happens in Texas surely won’t stay in Texas.
Big expectations for a long-awaited and significant increase in the state’s daily reimbursement rate also have been driving excitement among major owners and investment companies.
The big guys like Sabra and Ensign are all-but banking on better days in the Lone Star State, even as the nation faces continued talk of possible recession. If lawmakers don’t hit the targets these major players have set internally, we could see resources pulled from Texas and diverted to more provider-friendly states.
And if Texas denies providers a substantial rate increase, they likely won’t be the only ones. Already, providers in New York, New Hampshire and other states are crusading for rates that more accurately reflect the cost of the work they do — and new operating expectations that are very likely coming, and coming soon.
Of course, there are plenty of small and mid-size Texas operators whose fates ride on this session, too.
Mark McKenize, founder of Focused Post-Acute Partners, tells me he is “laser focused” on securing the Medicaid rate increase this year, for budget years 2024 and 2025.
“In terms of time, investment and local access to public officials who have the power to improve the skilled nursing care sector in Texas, this is where I have to focus my energy,” he said last week, noting the uphill battle for understanding and support even in the face of COVID and, now, historic labor shortages.
The Texas Health Care Association calculates that Texas long-term care providers are shorted $121 daily for each Medicaid patient they serve. Historically, Texas has bounced around the bottom of the 50 states for having the lowest skilled nursing Medicaid rate. But lawmakers haven’t budged on providers’ requests to shore up the payment system before.
Will cries about access to care and the threat of even more closures change hearts and minds this time? It depends on whether lawmakers are able to discern the very real pressure that staffing shortages have put on nursing homes’ bottom lines.
“As for the profile of skilled nursing facilities in Texas and probably other states, I’m not certain policymakers and the public at large have an accurate understanding of the staffing crisis in rural areas,” McKenzie said. “There is a false perception that wages and capital cost less in rural areas. Healthcare workers are in prime negotiating position – they are highly sought after and desperately needed.”
For the last few years in Texas and a few other states, there’s been only minimal extra support given.
During COVID, most operators in the state were eligible for a daily rate add-on, but that’s slated to run out at the end of 2023. As for a permanent blanket increase that reflects operators’ soaring costs and the more complex needs of their patients, no one knows exactly what’s about to play out.
The state has a $32.7 billion surplus, but lawmakers haven’t even come close to touching it in their early spending proposals. In fact, they’ve left $50 billion of available funding on the table to divvy up and alot to favorite causes. And to be sure, there are plenty of hands out.
But it also looks like elected leaders are cautious about approaching that surplus too aggressively, and they likely have no intention of touching the state’s rainy day fund. But let’s be honest, without some extra funding, things will only get more dreary for nursing homes.
I’ll be keeping a close eye on Texas for a ray of hope that might drive continued optimism nationally. The early chatter is remarkably positive. But being the skeptic that I am, I think I’ll keep my umbrella in arm’s reach.
Kimberly Marselas is senior editor of McKnight’s Long-Term Care News.
Opinions expressed in McKnight’s Long-Term Care News columns are not necessarily those of McKnight’s.
