BANGOR, Maine — Maine nursing homes stand to lose as much as $252 million in Medicare funding over the next 10 years, a combination of recently implemented reimbursement changes and new ones proposed in the national health reform legislation taking shape in Congress.
The long-term care of most nursing home residents is paid by Medicaid, the state-and-federal program for low-income and disabled Americans. But many institutions depend on shorter-stay Medicare patients to help them stay in the black.
Now, nursing homes say, the Medicare funding that has allowed them to augment their slender Medicaid budgets is in jeopardy. As Congress looks for ways to pay for an expensive overhaul of the nation’s health care system, reconfiguring Medicare payments is emerging as a popular option. And that, nursing home officials caution, is likely to translate into poorer care for Maine’s frail elderly and disabled residents.
A Senate health reform bill has not yet been released. But HR 3200, the legislation still under revision in the U.S. House of Representatives, includes $32 billion in funding reductions to nursing facilities nationwide over the next 10 years. In addition, the federal Centers for Medicare and Medicaid Services recently implemented a funding freeze for some nursing home services that will further reduce payments by $12 million over the next 10 years.
The combination could be devastating to nursing homes, advocates say.
“The bottom line is that Maine seniors’ Medicare-funded nursing homes will be substantially undermined by the pending health reform bill in the U.S. House of Representatives,” said Rick Erb, president and CEO of the Maine Health Care Association, which represents Maine nursing facilities.
Erb has urged Maine lawmakers to ensure that the health reform legislation, when it is made final, doesn’t have a negative effect on the bottom lines of Maine’s approximately 105 nursing homes and the patients and residents they serve.
Philip Bennett, administrator of Bangor Nursing and Rehabilitation Center on Texas Avenue, says the facility loses about $43 a day on for every long-term resident whose care is paid by Medicaid. That’s the difference between the $206-a-day average it costs to provide the care and the $163-a-day rate allowed by Medicaid.
By contrast, when Medicare pays for a patient to come and spend a week or two building strength or dexterity after a heart attack, stroke or surgery, he said, the facility actually makes a little money. Medicare will pay between $300 and $450 a day for a rehab patient, he said, depending on the level of care needed and the type of Medicare coverage the patient has.
“The only way we can recover our losses from Medicaid and pay our staff a livable wage is through Medicare,” he said.
The money helps the facility pay for “extras” such as better food, more engaging social and educational activities, newer furniture and better exercise equipment for all its residents and patients. It is also what allows Bangor Nursing and Rehab to pay its staff — including nurses, aides, activity directors and therapists — enough to keep them content in their jobs. This boosts employee morale and improves resident care, Bennett said.
According to the American Health Care Association, which represents U.S. nursing facilities, the funding stream at Bangor Nursing and Rehab is typical.
“Medicare funding is critical to [nursing facilities] because it props up inadequate Medicaid payments,” association president and CEO Bruce Yarwood said in a letter to House members in July. Approximately 70 percent of nursing home costs are labor-related, according to the association’s data, so cuts could put as many as 50,000 jobs at risk in 2010 alone.
“As the work force becomes unstable, quality [of care] will suffer,” Yarwood cautioned in his letter.
All four members of Maine’s congressional delegation have expressed concern over the impact of any Medicare cuts on the state’s health care system.
Ed Gilman, a spokesman for Democratic Rep. Michael Michaud of Maine’s 2nd District, said Wednesday that nursing homes have a legitimate concern.
“This is an issue we’re watching really closely,” he said. Although the House bill has the endorsement of three important committees, Gilman said, “by no means have we arrived at a package we’re ready to present to Congress.”
Paul Precht of the nonprofit Medicare Rights Center in New York said Wednesday that changes proposed in the House bill are aimed at encouraging nursing homes to take on more complex — and more expensive — rehab cases and providing incentives for them to improve efficiency.
Nursing facilities “should be paid more for higher costs, but also be more productive and efficient each year,” he said.
The proposed changes are in line with the recommendations of the nonpartisan Medicare Payment Advisory Commission, Precht said, and are in keeping with the guidelines of the Medicare Rights Center as well.