States have 'wide discretion' to cut Medicaid payments to providers, White House says

EDITOR’S NOTE: In very early morning voting, the House and Senate both passed the massive spending package described here. President Trump was expected to sign it into law before noon Eastern Time and end a brief government shutdown.

President Trump is expected to sign a deal to avoid a government shutdown looked ready to collapse late Thursday night, leaving on the table a two-year budget deal that would be a mixed bag for the long-term care industry.

Although a Republican proposal includes Medicare extenders and a permanent repeal of caps on Part B therapy services, it would subsidize some of its healthcare sweeteners with a $2 billion across-the-board cut to skilled nursing facilities.

More details about the plan — an outline of which had been floated since at least Tuesday, as McKnight’s reported — began emerging Thursday.

Tucked into the Senate version: a $2 billion cut for skilled nursing that, at least on paper, would make up for some of a projected $6.5 billion price tag associated with the therapy caps’ elimination.

“We are disappointed,” Mark Parkinson, president and CEO of The American Health Care Association/National Center for Assisted Living, said in an email received Thursday evening by McKnight’s. “An across-the-board cut like the one included in this bill would have a dramatic effect on our nation’s most vulnerable citizens. The low Medicaid reimbursements in many states do not cover the cost of care and providers struggle to keep their doors open. This cut will further jeopardize their important work.”

It was not immediately clear Thursday night exactly how legislators came up with $2 billion as the amount to cut.

In November, even as therapy associations rejoiced at the chance to get rid of hard caps once and for all in favor of lowering manual review thresholds, some warned that the change could come with painful offsets.

Options on the table included payment reductions for certain end-stage renal dialysis services, modifications to home health agencies and modifications to skilled nursing facility payment.

At the time, LeadingAge said it was deeply concerned about the possible impact of “across-the-board cuts and other potential changes to the payment system.”

Even last week, representatives for three therapy associations and the AARP said they were still uncertain how the government would balance an increase in therapy payments, saying only that at $6.5 million, the current estimated cost was half prior projections.

Last night’s expected Senate vote was dashed by the maneuvering of Sen. Rand Paul (R-KY), who called the overall budget deal “rotten” and criticized fellow Republicans as “hypocrites” for raising spending caps on both military and domestic spending.

At production deadline, President Donald Trump was advising federal agencies to prepare for a shutdown.

Even if Paul conceded the floor and let a Senate vote proceed after 1 a.m. today, Democrats could still defeat the measure in the House.

Many Democrats had said they would vote against a bill that didn’t address immigration issues, but that was largely before Republicans added funding for community health centers, delayed some Medicaid cuts and extended Medicare services to their latest proposal.

Regardless of the timing of any vote, providers and those who represent them in Washington will no doubt spend Friday trying to figure out how the budget ultimately headed to the president will impact them.

For its part, LeadingAge said Thursday evening that it was pleased the bipartisan agreement would increase non-defense discretionary funding because it could be a boon to seniors.

“Additionally, we support many of the Medicare provisions, including the long-awaited repeal of therapy caps, extending the home health rural add on payment, adding physician assistants as attending practitioners for hospice and improving  access to telehealth,” the organization said in an email to McKnight’s.