The coronavirus pandemic has put a glaring spotlight on the cost of delivering quality care at nursing homes and how much states are willing to pay for it, and the only true solution would be to fund facilities at a rate commensurate to the oversight regulations in place, according to one top provider executive.
“That’s all we’re asking for. If you want higher and more oversight and more rules and higher quality, no problem. Just fund it,” said Eddie Parades, senior vice president of government affairs for StoneGate Senior Living. “That’s really what it would take on a national level.”
Medicaid reimbursement levels have been a key issue for long-term care advocates since long before the pandemic, but the COVID-19 health crisis has only exacerbated the problem, Parades explained.
December data from the American Health Care Association revealed that while Medicaid is the primary payer for nursing homes, it reimburses only about 70% to 80% of the actual cost of care in those settings. The result is “shoestring budgets and ongoing operating losses” for providers. A February LeadingAge report came to identical conclusions about Medicaid reimbursement levels.
“This gap has grown over the last few years and the national pandemic has focused a spotlight on that payment gap,” Parades told McKnight’s Long-Term Care News on Friday.
“I’m hopeful that a result of the national pandemic will be attention to this Medicaid payment gap and states will realize that needs to be addressed. Specifically, it’s clear that good quality of care comes at a cost and thus there would be a direct correlation between reimbursement levels and quality of care delivered,” he added.
In order to do so, Parades suggested the “reinstatement of a Boren Amendment-type solution, which would require states to fund at the regulatory requirements that they impose.”
“That really is the national solution,” he asserted.
The Boren Amendment, which was in place from 1980 to 1997, required that Medicaid nursing home rates be reasonable and adequate to meet the costs incurred by facilities in order to provide care in services inline with state and federal regulations. State Medicaid directors strongly opposed the rule and it was later repealed under the federal Balanced Budget Act of 1997.
Parades noted that the Medicaid payment gap is different in every state, but the target reimbursement rate for nursing facilities should be around 97%.
“A state doesn’t want to say we’ll pay you dollar-for-dollar because you know what [providers] would do? They would just increase the costs,” he said.
“You always want to pay a little less than costs to encourage efficiencies, but when you get less than 95%, now the providers are carrying a business burden and risk access to care, meaning [nursing home] closings,” Parades warned.