Little or Nothing

Long-term-care administrators are hopeful, but skeptical, about how healthcare reform will affect them

Long-term care administrators are anxious to see healthcare reform move forward, but they want to make sure there’s something in it for them.
It wouldn’t be an exaggeration to say they’re skeptical. After all, they’re facing cuts in Medicare payments totaling as much as $16 billion over the next 10 years, due to a rule from the Centers for Medicare and Medicaid Services. They fear that the cuts could lead to reductions in long-term-care jobs and worse, negatively impact the well-being of their residents. (Seventy percent of long-term-care costs are labor-related, according to the American Health Care Association, Washington, D.C.).

“We support healthcare reform, but that cut [in funding] will be tough,” says Donna Doneski, director, public affairs, American Health Care Association (AHCA). And the outlook isn’t much better for Medicaid, which affects about two-thirds of long-term-care residents. “There is nothing in [proposed healthcare reform legislation] about Medicaid,” she says. Medicaid has experienced a $4.2 billion shortfall annually. “This has been a perpetual problem for us.”

Redirection and recalibration
The outlook was not so bleak last February, when the Federal Medical Assistance increase looked promising. “We had hoped this would be helpful with our Medicaid budget, but much of it was redirected to transportation and other areas,” says Doneski. Then, a recalibration ruling last July added salt to fresh wounds. In an effort to better align Medicare payments with costs, CMS issued the FY 2010 recalibration, which would result in a $1.05 billion (3.3 percent) reduction in payments to nursing homes. This more than wiped out the 2.2 percent increase that was the fiscal year update to Medicare payments. The recalibration is expected to take a major toll on the industry. “While we were pleased with the increase, we are still experiencing underfunding, so our folks are understandably anxious,” she adds.

Nevertheless, Doneski says the American Health Care Association is “pleased to see people working hard on these issues.” That said, she hopes the rhetoric calms down.

“The long-term-care [sector] can be obscure compared to other provider groups,” she continues. “Long-term-care folks need these town meeting platforms. We want to see healthcare reform move forward. And, while we understand that budget cuts have to be made, we want them to be sustainable.”