As the partial government shutdown breaks records and stretches toward a month running, skilled nursing industry advocates are hopeful that resolution is on the horizon.
Government gridlock has spared Medicare and Medicaid thus far, since they are not subject to annual appropriations bills. However, Senate Finance Committee Ranking Member Ron Wyden (D-OR) sounded an alarm last week that imminent cuts could be coming to Medicare if Congress doesn’t pass a bill to end the shutdown.
Barbara Gay, vice president of public policy communications at LeadingAge, noted that in failing to finalize a spending bill for fiscal 2019, Congress and President Trump have left spending caps in place, which were enacted under the Budget Control Act of 2010. Over the past several years, Congress has waived those caps, which call for total federal spending to be ratcheted down to levels that neither most legislators nor the White House can actually support.
“Without a spending bill containing a waiver, the Budget Control Act caps could trigger spending sequestration across all government programs,” said Gay, noting that Medicare reimbursement, which is already subject to 2% sequestration, would get an added cut of about 0.1% if a spending bill with a budget caps waiver doesn’t become law by end of January.
That scenario would spell slightly smaller reimbursements for SNFs, but she is hopeful that the matter is resolved in the not-too-distant future.
“It is hard for me to believe that this situation will continue indefinitely. As I see it, the ball is in the Senate’s court,” said Gay, adding that senators could pass spending bills already passed by the House. “At some point, I have to believe there will be enough senators willing to vote to override the [president’s] veto.”
Clifton Porter II, chief lobbyist for the American Health Care Association, expressed similar optimism alongside worries about Medicare payments.
“We remain hopeful that a solution to the shutdown will develop soon,” he told McKnight’s. “However, we are seriously concerned about any potential Medicare cuts that may be required in the pay-as-you-go law. Medicare beneficiaries rely on skilled nursing providers to provide important rehabilitation and care. We can’t afford to jeopardize those services.”
While HHS and CMS remain funded, the association’s members have been affected by the closure of E-Verify, which falls under the authority of the Department of Homeland Security. Several new interim policies have been put in place and deadlines extended to relieve the burden on employers and workers who rely on the employment status verification system, Porter said.
The shutdown also is impacting the Department of Housing and Urban Development’s loan program for SNFs, putting acquisitions and refinancing request on hold. Experts say the building backlog could delay the process further, once the government ramps back up again.
Robert Baxter, managing director with Lancaster Pollard, said with each day, the “queue is continuing to grow.” He estimated that that, if the shutdown ended this week, the backlog could add up to about four month’s worth of deals, and that will continue to build as the stalemate drags on.
Steve Kennedy, also with the firm, called the stoppage “frustrating” and said it is delaying the ability of owner-operators, often small business owners, to fund construction projects and invest in their facilities. He’s worried that this could negatively impact job growth, and result in lower debt-service coverage and a high probability of payment defaults on loans.
“From a policy perspective it’s frustrating and, candidly, deeply disturbing, that a political difference of opinion regarding border security has a clear negative financial impact on American small business owners directly and indirectly serving the senior living industry, and our country’s senior citizens,” he told McKnight’s.
