Feds curbing Medicaid match money will be detrimental to nursing home resident care

by Brian Lee, Executive Director

A recent proposal by President Obama and Congress to scale back a federal Medicaid matching program used for nursing home care has the potential to hurt residents.

Florida’s nursing home residents have just come out of a brutal legislative session.  They are staggering from sweeping budget cuts of nearly $200 million coupled by a rollback of staffing hours and a refusal to accept the Money Follows the Person dollars ($37.5 million) that could have helped transition them back to their homes. 

Let’s face it, our state’s nursing home residents have already borne the brunt of austerity and it appears as though the feds are moving in for the knockout punch. 

Even with the recent Medicaid reimbursement reduction, the nursing home industry has been able to absorb these types of cutbacks due to high Medicare reimbursements and an innovative matching program established back in 2009.  Florida law permits nursing homes to pay into a fund in which the money is pooled to draw down federal dollars at roughly a 40/60 match.  This generates about $465 million and offsets much of the current and past state Medicaid cuts without much compromise to the providers’ operational expenses, such as paying direct care staff. 

But feds are calling the program a “Medicaid tax gimmick” and would like to close the maximum allowable match from 6 percent to 3.5 percent.  

As the nursing home industry is more than 80 percent taxpayer funded, it is prudent for lawmakers to be fiscally responsible with our money; however, there must be serious consideration of what will be the true economic and human impact if they decide to close this loophole under the banner of “saving money.”

The reduction in staffing hours alone will have a profound rippling effect.  Residents are going to be harmed because providers are not required to staff at higher levels and will be seeking ways to trim their budgets.  Increased hospitalizations will escalate taxpayers’ burden as more residents are going to be injured, bedsores will go unchecked, and residents will become malnourished and dehydrated.

If politicians drop the federal Medicaid match they will share the blame of this neglect and abuse as shrewd owners and administrators will try to cut corners in direct care costs to maintain profitability – and in the long run, they won’t save a dime of taxpayers’ money.

The overarching problem is that our elected representatives are making fiscal policy without a complete picture of nursing home economics.  On one hand, high-powered trade association lobbyists claim that their industry is going broke, but on the other hand, earnings reports from publicly traded, multi-facility chains show an industry raking in millions of dollars in profits.  This is because laws have allowed providers to play a complex shell game of separating assets from operations and convoluting reporting mechanisms to agencies and lawmakers. 

The industry should be expected to come clean and fully disclose its overall and aggregate organizational structures and profitability including, but not limited to, any nursing home corporations, limited liability companies, affiliated corporations, or private investment funds so the government knows exactly how to best fund resident care.

Providers should take the first step in good faith and compile and submit all corporate and profitability data to federal and state executive and legislative bodies tomorrow.  This effort would begin to minimize these types of budget battles and allow the development of a long-term financial solvency plan with the residents’ care and rights as the focus.

Otherwise, residents will become homeless as nursing homes put themselves out of business and drag our state’s economy down with them.  Current and prospective retirees from across America right now are “state shopping” to figure out where is the best retirement location.  Just like young couples evaluate school districts in prospective moves, seniors consider what the long-term care situation is in respective states.  If Florida industry representatives and politicians keep nickel and diming each other at the expense of residents, it will send a clear message: “don’t retire here.”

The matching program needs to be left in tact for the residents’ health, safety and welfare.  But a decision to do so should require new demands of accountability on the industry if nursing homes expect to receive the funds.  Attaching additional strings to match dollars is needed to ensure residents receive the funds for their direct care services and so they won’t be diverted to fill the pockets of corporate CEOs and shareholders. 

It’s not every day, that I, in particular, see eye-to-eye with nursing home industry representatives, but on this issue, I do.  These cuts are ill-timed, they will hurt resident care and they won’t save taxpayers any money.

Brian Lee served as the State of Florida nursing home and assisted living resident ombudsman for most of the past decade.  He now serves as the Executive Director of the long-term care resident advocacy group; Families For Better Care, Inc.