Medicaid reimbursements for Florida nursing homes would drop nearly $81 million next fiscal year in a new budget proposal, pitting state lawmakers against providers in a battle likely to take place in states across the U.S. in months ahead.
A $42.1 billion spending plan unveiled last week in the Florida House includes a 2% cut to Medicaid funding for nursing homes. That would essentially reduce funding by about $125,000 per facility, per year, if approved, according to the Florida Health Care Association.
Association CEO Emmett Reed in a statement said providers in the state are “facing a significant economic crisis, caused by the combination of increased costs related to COVID-19 and chronic Medicaid underfunding.”
“While we recognize that the Legislature must make tough decisions this session, we don’t believe the budget should be balanced on the backs of nursing center residents and their frontline caregivers, who have already sacrificed so much over this past year,” Reed added.
A $42.3 billion budget proposal from state Senators did not recommend Medicaid cuts for nursing homes.
Providers across the country have been clamoring for increases in Medicaid reimbursement as a critical way to address staffing shortages, in particular. But some now fear that support for state and local governments included in the latest COVID-19 relief package could actually undermine their efforts come budget time.
“The new American Rescue Plan funds might effectively further subsidize business tax cuts beyond what our governor had already proposed,” Brendan Williams, president and CEO of the New Hampshire Health Care Association told McKnight’s Long-Term Care News Friday.
New Hampshire’s governor had proposed flat funding for nursing home care in the next two-year budget that begins July 1.
“The state has also pocketed all the enhanced FMAP dollars drawn off our daily rate, so ‘savings’ on the backs of seniors and caregivers are already being used to pay for his proposed tax cuts,” Williams said. “I am very concerned that the American Rescue Plan will just provide further means for ambitious state leaders to promote themselves as fiscally responsible tax-cutters, while also short-changing Medicaid to pay for tax cuts.”
The American Rescue Plan prohibits local governments from using federal funds to offset lost tax revenue or facilitate tax cuts, though legal challenges are already underway.
Flat funding or worse?
In Pennsylvania, where the governor has denied a Medicaid increase for the seventh consecutive year, associations representing nursing homes are calling on leaders to reconsider the state of the industry.
“Coupled with skyrocketing costs throughout the past year, an underfunded Medicaid system would spell disaster for nursing home providers, workers and residents,” said Zach Shamberg, president and CEO of the Pennsylvania Healthcare Association. “We stand with Florida and every state across the country in our call for prioritization and support for long-term care, especially as it relates to an investment in the Medicaid program.”
In Florida, Reed maintains any budget needs to better prioritize nursing home residents and providers. He noted that high costs for personal protective equipment, testing and staffing support, coupled with declining occupancy rates, have depleted revenues for providers.
“While nursing centers received significant funding from the federal government over the past year, precautionary measures necessitated by COVID-19 have already depleted those funds, and the rising costs of keeping residents safe and well cared for will continue even as the number of cases declines,” he said. “It’s that critical our nursing centers have the resources they need to recover from the pandemic, strengthen their workforce, upgrade their aging physical structures, and continue implementing solutions to ensure seniors have access to high-quality long term care.”