State may cut millions from nursing homes

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New York State could severely slash nursing-home funding under Gov. David Paterson's (D) budget proposal. Other states could follow suit as they struggle with budget deficits.

The Legislature will convene next Tuesday, August 19, to decide how to cut at least $1.2 billion from the federal budget, according to news reports. Nursing homes are expected to take a severe hit—perhaps $500 million, according to one news outlet. The cuts will likely amount to a several job cuts at each nursing home, observers say. About 65% to 70% of nursing home residents in the state use Medicaid.

This April, 23 states and Puerto Rico reported projected budget shortfalls of up to $26 billion for FY 2009. The National Conference of State Legislators had blamed the shortfalls on the crumbling housing market and other recent economic calamities (McKnight's, 4/29). In addition, states' revenues dropped by 5% in the first quarter of 2008 compared to the same time last year, the third straight quarterly loss in a row (McKnight's, 7/2).