Medicaid outlook bleak for providers in 2012, report finds

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Joseph Lubarsky
Joseph Lubarsky

Unprecedented state budget deficits will result in historically low Medicaid reimbursements to long-term care facilities, a new report finds.

The unreimbursed funds from Medicaid to nursing homes is projected to exceed $6.3 billion in 2011, which means an average per-patient shortfall of $19.55 per day, according to an annual study conducted by Eljay LLC, on behalf of the American Health Care Association. That's a jump from a $16.54 per day loss in 2009, according to the study

Eljay analysts and AHCA state affiliates attribute the shortfall to a slower-than-anticipated economic recovery and regulatory adjustments to Medicaid and Medicare this year.

And while many providers have relied on Medicare to subsidize Medicaid patients, they will lose that patch in 2012. “The combined shortfall of both Medicare and Medicaid is projected to exceed $2 billion, marking an end to the current reliance on Medicare cross-subsidization of Medicaid shortfalls and the beginning of greater uncertainty,” the report states.

Eljay President Joseph Lubarsky, who authored the report, said at least 60% of states are struggling with reduced Medicaid rates or had no rate increases in fiscal year 2012.

AHCA President and CEO Mark Parkinson said that it's clear from this report that operators are “on the brink.”

“As good as nursing facilities have been this year in providing quality care, they deserve more than a lump of coal this Christmas through these massive Medicaid shortfalls,” Parkinson said.

Richard Herrick, president and CEO of the New York State Health Facilities Association, joined Parkinson's call for legislators to stop cuts to long-term care providers.

"Those who were hanging on by their fingernails were hanging on from Medicare," he said. "There's no question that New York can be categorized as a high-cost state. There's little the operators can do. ... We've very concerned."

The Alliance for Quality Nursing Home Care's President, Alan G. Rosenbloom, said that he hopes members of the Medicare Payment Advisory Commission (MedPAC) keep a historical perspective when issuing recommendations. The panel held a hearing Thursday.

“This could be a replay of the early phases of the SNF Prospective Payment System (PPS), when roughly 20% of nursing facilities filed for bankruptcy, nurse staffing levels plummeted 17-33%, and survey deficiencies increased significantly,” Rosenbloom warned in a statement.