Category Archives: Medicaid funding

Kasich: Full Speed Ahead With Medicaid Expansion

In announcing his support for Medicaid expansion, Ohio Governor John Kasich said that while he “opposes” Obamacare his move “makes great sense for the state of Ohio.” As FL GOP Gov. Rick Scott and AZ GOP Gov. Jan Brewer have already signed on to Medicaid expansion, the longer term practicality of the policy is, some say, superseding political ideology. That remains to be seen — but there’s no question Kasich is a huge ‘get’ for the White House.

Kasich statement in release of his proposed state budget: “While a complex decision, this reform not only helps improve the health of vulnerable Ohioans and frees up local funds for better mental health and addiction services, but it also helps prevent increases to health care premiums and potentially devastating impacts to local hospitals. Additionally, it avoids leaving Ohioans’ federal tax dollars on the table and keeps the federal government from simply giving them away to other states. Importantly, Ohio will roll back this extension if the federal government changes the rules.”

Enitlement Reform Options: The Clear Leaders

While it appeared a “Grand Bargain” was conceivable following the 2012 election, the unfortunate fact in the wake of President Obama’s ideologically combative State of the Union speech — and other recent smoke signals from Senate leadership offices — is that we’re headed for another depressing, budget crisis-to-budget crisis session of Congress at least through the 2014 mid-terms.

Despite the odds of major entitlement reform are now far less than 50/50, Politico, National Journal and other new reporting indicates there are several structural savings opportunities through proposals already on the shelf at influential progressive think tanks in Washington. The menu is as follows:

Social Security: ‘Chained CPI’ — Savings: $112 billion

The idea is to change the way the government figures out how much more seniors should get in Social Security benefits each year to account for changes in their cost of living. This new formula — a tweak to the consumer price index — would assume that people switch their buying habits when prices rise, rather than just buying the same things over and over. So, for example, if the price of ground beef goes up, someone might buy chicken or fish instead. The result: Social Security benefits will rise more slowly.

Social Security: Lift cap on taxable earnings – Revenues: $500 billion or more

Even if the Democrats accept chained CPI, they’re going to want something in return. One big one: Let the highest earners pay more Social Security payroll taxes. Lift the cap so 90 percent of all Americans’ earnings are taxed — it’s only about 83 percent now — and a Social Security deal could raise about $550 billion in revenues over the next 10 years, according to estimates by Third Way, which has endorsed the approach. It would also wipe out Social Security’s deficit through 2020.

Medicare: Expanded means testing — Savings: $20 billion

Obama has said he won’t consider Medicare changes that would shift costs to seniors, but an expansion of the program’s means testing is the one benefit cut Democrats have hinted they might accept <http://politi.co/WfWdNI>  — because it would hit wealthier seniors and spare the rest. There’s already some means testing of premiums for Medicare coverage of doctors and prescription drugs, thanks to Obamacare and the 2003 law that created the Medicare prescription drug program. The version that Obama proposed in his 2011 deficit plan and could put on the table again, would extend that means testing to charge higher premiums and hit a larger group of seniors.

Medicare: Faster payment reforms — Savings: $10 billion

Republicans often complain that Democrats don’t want to make any real changes to bring more money into Medicare — they just want to keep cutting payments to providers. But there’s no real controversy over Obamacare’s incentives to provide more efficient medical care, and that’s where some on the left think there’s potential for common ground — by just beefing up those experiments.

Medicare: Drug rebates — Savings: $135 billion

One of Obama’s biggest Medicare savings ideas would come straight out of the pockets of drug companies — which means he’d face a fight, but probably not from Democrats. Right now, pharmaceutical companies have to pay a rebate when the government buys prescription drugs for people on Medicaid but not for low-income seniors who qualify for both Medicare and Medicaid. The proposal, which Obama included in his deficit plan, would make the drug manufacturers give the same rebates for these “dual eligibles,” adding up to huge savings for Medicare.

 

 

 

Health Providers Must Emphasize Cost-Efficiency in FY 2012 Budget Debate

Capitol Hill lawmakers, regulators and the media have heard it all before at the onset of the annual budget dance: No cuts to Medicare — especially as state budgetary chaos has eroded Medicaid funding stability. With the 2012 budget debate about to get underway on Capitol Hill, the nature and composition of the new Congress — with an eye on spending cuts — will require health care providers of every stripe to emphasize how they’re part of the solution when it comes to saving tax dollars.

As Skilled Nursing Facilities (SNFs)  are the dominant provider of Medicare post-acute services, a recent Health Affairs article, “The Revolving Door of Rehospitalization From Skilled Nursing Facilities,” corroborates the general viewpoint that care quality and spending efficiency can be enhanced by policy reforms.

States the article, authored by Vincent Mor, Orna Intrator, Zhanlian Feng, and David C. Grabowski: “Payment incentives in Medicare do not encourage providers to coordinate beneficiaries’ care. Revising these incentives could achieve major savings for providers and improved quality of life for beneficiaries.”

An Avalere Health study conducted for one major provider group, the Alliance for Quality Nursing Home Care, echoes this sentiment in terms of possible savings: “Health policy experts view many of these [rehospitalization] incidents as preventable — to the tune of potentially $12 billion in annual savings, according to the Medicare Payment Advisory Commission (MedPAC).”

It further suggests “studying the sector can provide a unique window into addressing rehospitalizations, and that potential strategies to reduce this growing phenomenon can help sustain ongoing improvements in nursing home care, in addition to saving tax dollars.”

The first quarter 2011 health policy debate — with its inherent savings discussion — will be fertile ground upon which to advance SNFs’ and others’ public policy objectives in terms of making “savings” a central messaging thrust. Gordon Hensley

Houston Chronicle: Nursing Homes Merit Higher Priority During Hurricane Season

Leave a reply

Here’s the latest op-ed authored by Strategic Media, Inc. for a client, the Texas Health Care Association (THCA), appearing in the Sunday, July 11 edition of the Houston Chronicle:

Nursing Homes Merit Higher Priority During Hurricane Season

By TIM GRAVES AND GREG LENTZ

July 11, 2010

As the Houston area approaches the heart of hurricane season, there are several lessons learned from our trying experiences with Rita and Ike. Chief among these lessons is that ensuring our most vulnerable citizens’ safety is a priority during a major storm. Although there has been progress working with state lawmakers on transportation issues, there remains room for improvement in terms of how we will improve access to buses and emergency vehicles to ensure residents reach safety as quickly as possible.

Beyond transportation concerns, we had extreme difficulty during Hurricane Ike ensuring that electrical power was restored to facilities throughout the area. No doubt it was an enormous undertaking to restore power to the three million individuals in the area. But it is essential to view nursing homes as a priority in the same manner hospitals are viewed as a priority. Our facilities provide complex care services as well as around-the-clock care. Unfortunately, however, nursing homes have typically been viewed as residential — in other words, not a paramount priority when it comes to restoring power. On policy grounds, there are no logical arguments to justify this difference in status.

Historically, nursing homes have been expected to take care of themselves when it comes to weather emergencies. The situation in Ike’s troubling aftermath was challenging, and truly heroic efforts were taken by nursing homes to ensure residents retained 24-hour access to care. Long-term care facilities along the vulnerable Gulf Coast have instituted important life-saving disaster contingency plans to ensure critical health care services are continually provided throughout the ordeal — regardless of whether the facility is completely evacuated out of harm’s way, or shelters in place. During Ike, for example, 86 of the state’s 1,144 nursing homes, affecting 20 counties, were evacuated — impacting approximately 7,000 elderly patients.

Nursing facilities generally evacuate 72 hours before a disaster strikes. Both buses and ambulances are necessary to transport patients beyond the storm’s reach. Other expenses incurred by evacuating facilities include lodging for additional staff and their families, overtime and emergency supplies. Likewise, facilities sheltering in place have additional expenses such as generators, fuel, ice, water, additional food for staff and their families and day care for staffers’ families. Costs simply to evacuate a single nursing home can run from $75,000 to $100,000.

When sheltering in place, the generators necessary to fully power a nursing home cost approximately $70,000 each, and burn 10 gallons of diesel fuel per hour to run air conditioning. Therefore, as a result, both for-profit and nonprofit long-term care facilities urgently required immediate help with transportation and other disaster-related expenses. Yet, under the Stafford Act, for-profit long-term care facilities are not authorized to access federal assistance. Under current law, inexplicably, for-profit long-term care providers are precluded from accessing this funding. In Texas, only 14 percent of all nursing facilities are not for-profit. In short, current federal policy is ill conceived and merits immediate reform.

Disasters wreak havoc indiscriminately, damaging for-profit and non-profit facilities alike. In many localities, for-profit nursing facilities may be the only long-term care provider available in an entire community. They, too, should be provided with equal access to federal resources. Yet the unfortunate backdrop for this entire discussion is that long-term care facilities are already facing the significant challenges of a historic state and federal funding squeeze.

In addition to the fact Texas facilities are now being forced to absorb more than $1 billion in federal Medicare cuts over 10 years, state leaders in Austin are considering $25.6 million cuts to Medicaid-funded nursing home care. It is clear we need to fine-tune the complicated state and federal disaster response process. We are pleased with progress to date working with state leaders, and will continue to work cooperatively to improve the overall process. However, in addition to improving access to federal disaster relief, funding stability from Austin and Washington in the context of Medicaid and Medicare funding, respectively, is a necessary prerequisite to progress in helping our residents and facilities in times of danger.

Tim Graves is president of the Texas Health Care Association in Austin; Greg Lentz is chair of THCA and president and CEO of Healthmark, operating eight facilities in the greater Houston area.

For SNFs, FMAP Extension Badly-Needed as State Medicaid Budgets Wither

4 Replies

Putting aside the various policy benefits and liabilities associated with the respective Senate and House health care reform bills, currently buried in a snowdrift of indecision somewhere on Capitol Hill, the House bill’s temporary federal medical assistance percentage (FMAP) increase is a vital necessity to Skilled Nursing Facilities (SNFs) nationwide struggling with the most basic of business crises: Cash flow.

Specifically, the House bill extends the temporary 6.2% FMAP increase from the American Reinvestment and Recovery Act (ARRA) through June 30, 2011. While the provision is not in the Senate bill, President Obama’s FY 2011 budget proposal includes the FMAP provision.

SNFs are arguing, correctly, that disastrous state fiscal conditions and the subsequent pinch on state Medicaid funding merits more temporary federal help, as the sector’s operating margins are the lowest of any provider group. Providers at the state level are out early, notably in Texas, making the case that SNF funding is being squeezed much as it was a decade ago in the wake of 1997 BBA implementation. The result, then, was 15-20% of the SNF sector driven into bankruptcy, worsening patient care and many lost jobs.

In testimony yesterday at a Health and Human Service Commission (HHSC) hearing in Austin, TX on what appears to be likely state budget reduction options, the Texas Health Care Association (THCA) warned that any new cuts now to Texas Medicaid payment rates for nursing home care will confront the nursing home profession with what he called “dire financial consequences.”

Tim Graves, the THCA President, noted the Obama Adminstration has already begun to implement $725 million in federal Medicare cuts that went into effect (by CMS regulation) in October, 2009, and said Texas has historically relied upon federal Medicare funding to “prop up the already inadequate funding of state Medicaid rates that have not met the state’s own rate-setting methodology since 1999.”

Graves’ argument is one state lawmakers will and should hear as the state budget debates unfold throughout Spring 2010: “Before we engage in discussions about cutting Texas seniors’ key Medicaid-financed programs, we must look first at the fact nursing homes are already having to deal with a state and federal funding environment that squeezes facilities’ abilities to recruit and retain the high quality direct care staff that make the ongoing provision of quality care possible.”