Nursing homes say Medicaid payments must rise

Operators see costs go up faster than state’s reimbursement

Yakima Herald-RepublicApril 17, 2014 

It may sound like a lot, but $22 million is just a baby step in the right direction when it comes to funding nursing homes, says Jeff Hyatt.

He ought to know; he’s the third generation of his family to work in the nursing home industry, and he serves as chairman of the Washington Health Care Association, which advocates for nursing homes and assisted living facilities.

In the Legislature’s supplemental budget this year, $22 million in Medicaid dollars was allocated for nursing homes: $9 million to provide more money and benefits to low-wage earners who work in the facilities and the remainder for direct care services.

“It’s kind of a down payment on quality — being able to maintain quality,” said Hyatt, co-owner of Hyatt Family Facilities, which operates nursing homes in Yakima and Spokane.

“When you’re looking at an industry that hasn’t seen an adjustment for almost 10 years, it’s a step in the right direction, definitely, and we’re very appreciative of that, but there’s a lot to do.”

The adjustment is to the rates at which Medicaid reimburses nursing homes, which haven’t budged since 2005.

“Certainly if you look at costs across the nation, 2005 doesn’t come close to where we’re at today,” Hyatt said. “Utility costs, food costs — they’ve all gone up.”

Labor makes up at least 60 percent of nursing home costs, and that’s gone up, too, especially with the new requirement for businesses to provide health insurance coverage to their employees.

It’s a tough pitch to ask the Legislature for more funding, especially now with lawmakers under the wire to put more money into basic education.

Still, Hyatt hopes that next year’s session will yield more substantial results. He says that on balance, providers know that they aren’t going to make money from every payor source — be it Medicaid, private insurance or another payor — but “you should at least break even.”

In 2012, the most recent data the Health Care Association has, he said, more than half of the state’s nursing home providers lost money.

“What happens is it gets passed on to the consumer in the form of reduced accessibility,” he said. “In order to keep the doors open, which we will, we have to reduce our losses; if our losses are greater with Medicaid, then we have to reduce our Medicaid levels.”

Hyatt has worked with several legislators, including Rep. Bruce Chandler, R-Granger, to make nursing homes a priority.

Chandler said that as nursing homes have been forced to become leaner, it’s almost like they’re being punished for their efficiency.

“As funding has declined, especially on a per-bed or per-patient basis, as providers struggle and they figure out a way to make that work in the short run, I think too often there’s been an assumption within the Legislature that they can tolerate another reduction,” he said by phone last week. “I think … the legislators need to be realistic about what the actual costs are.”

“We put them in an untenable position of compromising quality of care or access to care, or going out of business,” Chandler said. “We need to look at better options.”

The rate adjustment is long overdue, he says.

Chandler says the Legislature won’t really have a choice when it comes to allocating more dollars for nursing homes.

“If we don’t solve the real funding issues in long-term care, then what I’m afraid we’ll see is that increasingly, nursing home providers just won’t take Medicaid patients,” he said.

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