Big state budget changes alter nursing homes' outlook

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Governor Bruce Rauner
Governor Bruce Rauner

In Missouri, the difference between the coming fiscal year and this time last year couldn't be more stark.

Nursing home administrators there are eagerly awaiting Gov. Mike Parson's (R)  approval of the budget, which proposes a boost in Medicaid funding for nursing homes.

The increase would help offset the 3.5% reduction in reimbursements that took effect under a different governor last July — a move widely regarded as the states' biggest hit ever to Medicaid and the seniors who depend on it.

"We have worked really hard with our local legislators on this, and we're really hopeful the governor passes the budget," Paul Ewert, CEO of Beth Haven, told the Herald-Whig. "Caring for patients is always our number one, so this past year we've had to become really careful about our expenses. We didn't fill open positions if we didn't absolutely have to, and we were unable to give our employees a raise this year. The cuts meant a great deal to how we operated."

Now it's Rhode Island bracing for the worst.

Nursing homes in the Ocean State are crying foul over a “devastating” 8.5% cut in their Medicaid reimbursements — a cut that is, in part, intended to offset a potentially big payout in a botched lawsuit.

A lawyer for the state failed to respond to a suit claiming Rhode Island's Medicaid reimbursement rate was improperly cut, and Rhode Island is in the process of appealing a decision that would put an additional $24 million into nursing home coffers over the next three years.

Instead, a judge issued an injunction and the Legislature is considering making up the potential legal blow with a massive operational cut.

Republicans called out the cuts in a legislative brief Monday.

“The budget approved by House Finance while you were sleeping on Friday night will: expand the sales tax … and reduce payments to nursing homes so that they do not benefit from their successful lawsuit against the Raimondo administration,” said state Republican Party Chairman Brandon Bell.

In Illinois, meanwhile, the fickle nature of state funding and its potential to undermine nursing home operations remains on display.

Bloomberg News last week reported the state may see an exodus of Medicaid providers if it doesn't find a way to increase its reimbursement rate, which is among the lowest in the U.S.

In 2014, Illinois was the only U.S. state spending less than $5,000 per Medicaid beneficiary annually.

Gov. Bruce Rauner (R), who is running for re-election in November, proposed a 4% cut in Medicaid spending for fiscal 2019, but the final spending plan he signed Monday dropped that.

Making an upward rate adjustment next year won't be any easier. The state had a $7.52 billion backlog of unpaid bills early this month.

State Sen. Heather Steans, a Democratic leader on Medicaid issues who is also a budget negotiator, told Bloomberg Law the state's financial problems and other funding requests could undermine pleas from nursing homes.

“There is a lot of need to adjust rates appropriately. We're going to have to figure out how to make that work in the budget and how to prioritize,” she said.

State Rep. Greg Harris (D) also told the news outlet the state's Medicaid reimbursement rates must increase or providers will begin dropping out.

“It's a large discussion and you're going to have to find more money,” he said. “Either you're going to make more investments to get the results you want, or you're not going to have the providers to do the work.”