Maine is underpaying nursing homes $30 million. Will the Legislature bring them relief?

By Matthew Stone, BDN Staff
Posted Feb. 21, 2014, at 12:37 p.m.

The residents of Maine’s nursing homes have some of the most intensive health needs of any nursing home residents in the U.S. Maine’s nursing homes require some of the highest staff-to-resident ratios of any state, and are among the fullest anywhere in the U.S.

And they haven’t effectively gotten a raise in six years to reflect the rising costs of providing care.

The financial challenges of Maine’s 107 nursing homes will take center stage at the State House in the coming weeks as lawmakers consider a bill that proposes raising the rates homes are paid through MaineCare, Maine’s version of Medicaid.

The discussion about nursing home payments will take place as the number of nursing homes and residents slips nationwide and as states, including Maine, try to design long-term care systems for elderly residents that move away from a reliance on nursing home care.

High need, low deficiency

Maine’s 107 nursing homes are generally smaller than their counterparts elsewhere in the country. About 48 percent have between 50 and 99 residents, according to the federal Centers for Medicare and Medicaid Services, or CMS; nationally, the most common size is 100-199 residents.

And Maine’s nursing home residents receive some of the highest levels of staff attention. According to the Kaiser Family Foundation, Maine’s nursing home residents see 4½ hours of staff time each day, compared with a national average of four hours. Maine’s level is the fourth highest in the nation.

That’s a result of higher-than-average state requirements for staff attention to nursing home residents. The extra attention helps the state’s nursing homes take care of a population with greater health needs than most other states.

In 2010, Maine’s nursing homes ranked first for the percentage of residents with dementia — 55 percent, compared with 46 percent nationally. In 2011, Maine was one of 10 states where more than 65 percent of nursing home residents had four or five conditions that impaired their ability to perform everyday tasks.

The high staffing levels are directly connected to the quality of care Maine’s nursing homes provide, said Brenda Gallant, executive director of the Maine Long-Term Care Ombudsman Program, which pushed for the higher staffing requirements in the 1990s.

“We staff higher, and it shows in our care,” she said. “That’s really critical. There are just numerous studies that show the significance of staffing.”

In 2011, inspections of Maine’s nursing homes turned up an average of 4.6 deficiencies per facility, the 10th lowest rate nationally, and lower than the national average of 6.1. Maine’s deficiency rate has improved over time; it was 8.8 in 2007, according to CMS.

The viability challenge

Higher staffing also costs more. A year of nursing home care in Maine cost $98,550 in 2013 for a resident in a semiprivate room; nationally, the average cost is $75,405, according to Genworth Financial’s annual survey of long-term care costs.

While Maine’s nursing homes have higher staffing and provide better care, they’re not receiving better pay. MaineCare pays the bills for 68 percent of current nursing home residents, according to the Maine Health Care Association, which represents the state’s nursing homes.

Yet MaineCare bases its payment rates on the homes’ audited costs from 2005, and the rates have been based on those costs since 2008. Since 2008, nursing homes have received just one rate bump — a 1.5 percent raise in 2012.

Over time, those payments haven’t kept pace with the costs of operating a nursing home. Combined, the state’s nursing homes were underpaid $29.4 million by MaineCare in 2011, according to the Maine Health Care Association. The state’s portion of that sum is about $11 million; the federal government would pay the balance.

The bill pending before the Legislature this winter, LD 1776, would give nursing homes a raise by basing payment rates on audited costs from 2011. Nursing homes where MaineCare pays the bills for more than 70 percent of residents would receive a supplemental payment for each MaineCare resident. And rates would be adjusted every two years to keep pace with costs.

The Maine Health Care Association estimates the adjustments would cost the state about $12 million annually. The federal government currently matches every dollar Maine spends on Medicaid with about $1.60.

This year’s legislation pays the additional cost for the first year with proceeds the state expects to realize from no longer overpaying assisted living facilities, which offer a level of care less intensive than nursing home care. The state plans to recover those overpayments by improving the state’s Medicaid claims system. A state auditor’s report last year found it was overpaying up to $29 million annually.

Closure threat

Maine’s nursing homes have addressed their MaineCare shortfalls by shifting costs to the 21 percent of residents who pay for their care from their own assets and to the 11 percent of residents whose bills are paid by Medicare, which pays the facilities higher rates than Medicaid.

“That minority who are private pay are paying more than they should have to,” said Rick Erb, president and CEO of the Maine Health Care Association. “If you’ve saved all your life, that’s a kick in the teeth.”

In some cases, there might not be enough private-paying patients to absorb underfunding from MaineCare. That’s what happened in 2012 in Calais, where the 52-bed Atlantic Rehabilitation and Nursing Center shut its doors, forcing residents to move miles away to homes in Eastport, Lubec, Ellsworth and elsewhere.

Gallant, the long-term care ombudsman, said the Calais home’s closure and a desire to keep nursing home care available throughout the state spurred interest in forming a long-term care commission last year. The commission’s recommendations are the basis for the legislation pending this winter.

“People want care in their community,” she said. “When facilities close, it is very traumatic for people.”

A shift in long-term care

The United States has seen a gradual shift away from nursing homes in recent decades even as the population has grown older.

Between 2002 and 2011, the number of nursing homes nationally fell 5.3 percent to 15,683, according to CMS. Even with fewer nursing home beds, occupancy rates are lower — 83.7 percent in 2011 compared with 85.7 percent in 2002. Maine’s 90.6 percent occupancy rate is sixth highest.

In Maine, the number of nursing home beds has held relatively steady over the past decade at about 7,000, though that number was closer to 10,000 in the 1990s, before the state undertook a money-saving effort to shrink its nursing home population and enable more people to receive long-term care services at home and in their communities.

Many nursing homes converted to assisted-living facilities, where residents require less intensive care and costs are lower, said Gallant. The state raised eligibility standards to be admitted into a nursing home.

“People have to have expensive needs to qualify,” she said. “Nursing homes are faced with more of a challenge.”

As those changes took effect, the percentage of Maine residents older than 65 living in nursing homes declined along with their average length of stay, according to data compiled by the Muskie School of Public Service at the University of Southern Maine.

“We’ve been successful in allowing people to stay at home,” said Erb. “That tends to postpone the need for a home, not prevent it.”

But that transformation toward services at home isn’t complete. Maine last year received a $21 million federal grant through the Affordable Care Act to shift more of its Medicaid spending to in-home and community-based services. Part of the legislation pending this winter also charges a panel with crafting a plan for Maine’s long-term care system. And part of the charge for the Alexander Group, Gov. Paul LePage’s controversial Medicaid consultant, is a long-term care system review.

“They need to figure out what is the right mix,” said Julie Fralich, program director for disability and aging at the Muskie School. “Home- and community-based services are less expensive. To the extent that can be available, that’s a good alternative.”

If more of Maine’s aging residents can receive services at home for longer, that affects the projections for how many nursing home beds the state will ultimately need.

“We need to be creative and look at how can we improve and expand what we have now,” said Gallant, “and are there cost-effective ways to do that?”

Matthew Stone is BDN opinion page editor.

 

http://bangordailynews.com/2014/02/21/health/maine-is-underpaying-nursing-homes-30-million-will-the-legislature-bring-them-relief/ printed on July 23, 2014