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Kentucky’s nursing home providers breathed a collective sigh of relief Thursday when Gov. Andy Beshear (D) approved $99.6 million to boost daily rates until a Medicaid rebase that is still under negotiation kicks in.

The state’s Department of Medicaid Services designated the funds, meant to help nursing homes cope with inflationary pressures, as a “forecast error” to provide the funds quickly.

“The initial response from our membership has been positive,” Betsy Johnson, president of the Kentucky Association of Health Care Facilities, told McKnight’s Long-Term Care News Friday. “Our members need dollars in the door right now to deal with increased costs.” 

Kentucky’s Medicaid rate has not been rebased since 2008. The association and providers have been actively lobbying lawmakers and the executive branch for rebasing and funding increases in a desperate attempt to prevent facilities from shuttering. A letter-writing campaign proved particularly effective. 

Across the US this spring, nursing homes have secured sometimes historic Medicaid increases. It’s a trend Johnson hopes her members will be able to take advantage of.

But as negotiations continue, especially in states whose legislatures develop two-year budgets, worries are already arising about how willing state lawmakers will be to sustain increases. Some fear a one-and-done approach, or pay structures that give a big boost that will still leave facilities with daily losses — only to be followed with minimal percentage increases next session.

That was the case in Pennsylvania, where providers won a significant, 17% increase in 2022 after a 10-year dry spell. They faced the possibility of a flat line budget this year until state associations were eventually able to secure a small increase for nursing homes.

In Colorado, where nursing home spending was cut by 2% during the pandemic, a 2024 budget proposal offered a 10% increase, followed by 3% in 2025 and 1.5% in 2026. 

Such fall-offs in Medicaid increases were a topic of concern at the American Health Care’s Association meeting in Washington, DC, last week.

“Continual investment in our Medicaid provider nursing homes is critical to ensuring that facilities can sustain and reward their staffs and that the resources will always be present to care for the most vulnerable among us,” Rick Abrams, president and CEO of the Wisconsin Health Care Association told McKnight’s. “Our nursing homes will always be a critically important long-term care option for our seniors and for people living with disabilities.”

In Wisconsin, Abrams is “encouraged” that historic Medicaid increases in the 2021-23 budget will be maintained because they were added to the state’s rate-setting methodology.

The uptick brought the state’s direct nursing care component of the rate to a “very respectable” level of 125% of median cost; Abrams hopes to secure a similar increase for the state’s support services component for the next two-year budget, which will kick in July 1. That could mean a much-needed Medicaid funding infusion of $55 to $70 per patient day.

In Kentucky, the current, average daily Medicaid rate for providers is $221.20, which includes a $29 per day add-on that has been in place since Jan. 1, 2020. Rural providers can expect an increase of approximately 8% while urban facilities will get an additional 7.9% due to the emergency bridge funding. Johnson said they asked for an increase that would have amounted to approximately $28.80 per patient per day. 

David McKenzie, the owner of The Jordan Center, a 110-bed facility in Lawrence County, one of the poorest counties in the state, sent a letter to Eric Friedlander, secretary for the Cabinet for Health and Family Services, saying the facility “will not make it” unless it sees a Medicaid increase by July 1. Fully 90% of the facility’s revenue comes from Medicaid, McKenzie wrote. 

“We did everything the government asked of us,” McKenzie’s letter said. “We spent the money as we were asked, we were good stewards of the funds. … We have no one else to turn to for help.”

In an interview with McKnight’s Friday, McKenzie, who sits on the KAHCare board, said he was forced to close a wing during the pandemic due to staffing shortages, which also resulted in denying admissions. The facility regularly operated at 97% capacity prior to COVID-19. 

“I recalculate and recalculate my break-even every month,” McKenzie said. “Although [the bridge funding] is not enough to put me in the black, it’s certainly better than nothing. I’m grateful. And the [funding] — it’s close, which means hopefully that I can hang on a little longer.”

The Jordan Center has operated in Louisa, KY, as a family-owned business since 1974. McKenzie’s letter indicated that the facility did not have to lay off any employees during the pandemic, despite being in a “valley of death” as the one-two punches of COVID-19, inflation, and staffing problems continue pummeling the facility. He said on Friday that a single catastrophic event such as a broken sprinkler system or roof repairs could doom the nursing home. 

“I don’t know,” he said, when asked if the bridge funding would be enough to keep the facility afloat. “It’s touch and go. I’m in a high-risk situation and holding on by my fingertips. It’s a scary place to be.”