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.”