Medicaide cuts stun NJ nursing homes

It was a-coming: http://www.northjersey.com/community...ing_homes.html

Nursing homes that care for the sickest of patients should have been paid more this year under a new Medicaid reimbursement formula. But because of state budget cuts, it didn't turn out that way.

Instead, some nursing homes that had been slated for a substantial boost in reimbursements were warned last summer to brace for a 3 percent cut — only to be told in the autumn that their rates would be slashed by more than twice that proportion.

Like all things related to nursing-home finances, the reason is complicated — so much so that long-term center operators and their advocates were themselves caught off guard by the realization that a change meant to protect some nursing homes' bottom lines jeopardized others.

"Everyone had been told to expect a 3 percent cut, but some of our members suffered as much as an 8 percent cut," said Paul Langevin, president of the Health Care Association of New Jersey, which represents more than 300 long-term care centers. "That's a pretty dramatic difference, especially when you learn about it after you've already planned your budget and staffing levels for the year."

Here's what happened, in a nutshell: New Jersey officials had decided in July to move to a reimbursement system that would allow homes that care for the patients with greater medical needs to be paid at a higher daily Medicaid reimbursement rate.

But officials recognized that some of the facilities that care for healthier patients would be subject to an abrupt drop in revenue if the new rates weren't phased in more slowly, Langevin said. So the new reimbursement rules contained a provision that prevented any one nursing home's rates from going up or down by more than $10 a day.

But before that new rate system could go into place, the budget signed by Governor Christie called for a $75 million reduction in Medicaid spending on long-term care, which was supposed to be spread across all facilities in the form of a 3 percent cut. Because some facilities were already going to lose more than the amount called for in the new rate system, the state instead cut rates to those that hadn't already experienced a loss.

As a result, nursing homes such as Christian Health Care Center in Wyckoff, which three years ago opened a 68-bed, post-acute care unit to accommodate sicker patients, saw its daily per-Medicaid-patient reimbursement rate drop from $198 to $187, although the new rate system had previously promised to raise that figure to $225.

"It was really disillusioning to find that instead of moving to a rate system that would bring us closer to the actual costs of providing care, we would instead be taking a step backwards," said Douglas Struyk president and chief executive officer of Christian Health Care Center. He estimates his facility's actual cost of caring for Medicaid patients at between $250 and $260 a day.

The state notified nursing homes of the revised Medicaid rates in early October, more than three months into the current fiscal year, meaning some facilities would have to pay back a portion of reimbursements already received.

Since then, nursing home advocates have been lobbying the Christie administration and lawmakers for some relief from cuts they say could in time force them to cut staff or services. Struyk said his board has voted to put off filling 20 open positions, but doesn't know what the future impact will be.

Advocates say county-operated nursing homes also could be among the most hurt by the rate changes as they tend to serve patients who are predominantly on Medicaid.
State Sen. Loretta Weinberg, D-Teaneck, outgoing chairwoman of the Health, Human Services and Senior Citizens committee, said she is discussing potential solutions with other legislative leaders but doubts anything could be done in the current fiscal year to roll back cuts, as some nursing home operators are hoping.

To help nursing homes fare better in the next round of Medicaid budget talks, Weinberg urged nursing home advocates to enlist the people they serve — patients and their families — to help lobby for money to be restored during next year's budget negotiations.

"I think these cuts are harmful, and they are harmful to the most vulnerable of populations," Weinberg said. "We need to hear from the people who are affected. We need their voices on this."

The Jewish Home at Rockleigh is among the facilities hit by a higher-than-expected cut. Charles Berkowitz, president and chief executive of the not-for-profit home, said he expects to lose $317,000 a year because of the 8 percent cut to his facility's daily Medicaid rate. In addition, another change in state regulations now bars nursing homes from billing Medicaid for the beds they hold open for patients temporarily admitted to the hospital, which they are required to do for 10 days. That change means another annual loss of $40,000, Berkowitz estimates.

That lost revenue, which comes on top of even-steeper Medicare rate reductions to all nursing homes this year, has prompted the non-profit Jewish Home to turn to its residents, their families and other supporters for help in lobbying state officials to restore some funds cut from Medicaid.

"Our supporters have sent out 1,800 letters since October," Berkowitz said.

Eighteen of them came from Jane Kaufman, whose 102-year-old mother has been a Jewish Home resident for seven years. Kaufman said she decided to try to help because she's grateful that her mother was allowed to remain in a quality facility after she exhausted her savings and was forced to apply for Medicaid.

"We never knew that she would live this long, and neither did she," said Kaufman, who thinks many people don't realize the potential to run out of money if they live to an advanced age.

"It's very important that a place like the Jewish Home gets support," Kaufman said. "They have never treated my mother any differently since she went on Medicaid. They didn't try to turn her away. So I felt it was important for me to support them."

The reimbursement cuts come at a time when nursing home operators are already unsure how their bottom lines will be affected by the state's plan to contract with private managed care companies in the hope of reducing its Medicaid nursing home costs.

"There is a lot of uncertainty," said Larry Lane, vice president for government relations at Genesis Health Care, a national chain that operates 30 nursing homes and three assisted living centers in New Jersey, which together will lose between $6 and $7 million in Medicaid cuts.

Genesis had been a big proponent of the new reimbursement formula, and many of its centers made a decision to upgrade services and "go after the sicker patients," Lane said.

The chain already has decided to put off capital projects, freeze salary and benefits and avoid filling open administrative positions, Lane said.
But employers and workers alike are concerned that, without increased funds, cuts in nursing staff might follow.

Service Employees International Union Local 1199, which represents 7,000 long-term care workers in New Jersey, is already concerned that some homes are not staffed adequately, nor trained well enough, to care for these sicker patients, said Milly Silva, executive vice president.

"No one wants to see a tragedy where somebody ends up injured because of a lack of staff," Silva said.