State Increase In Rates Leaves Patients In Dire Straits

 

This past January the Massachusetts nursing-home bed tax jumped from $11.59 a day to $19.17 per day -- adding over $200 per month to private pay patient’s bills. Despite the soaring tax increase, the state slashed federal Medicaid reimbursement to nursing homes by about $23 million this year, leaving many elder-care facilities unable to cover the costs of daily care and forcing some self-pay patients into the Medicaid system sooner than otherwise. For those patients this may mean a smaller room and one or more roommates.

About 80 percent of the nursing home system is publicly financed by Medicaid and Medicare. The "nursing home user fee," or patient bed tax, was implemented by the state in 2002 and began taking money from an estimated 8,000 nursing-home patients who pay for their own care, and used it to help foot the bill for all Medicaid patients in the system.

The private-payer money was used to leverage federal tax dollars to shore up the state's ailing nursing-home system, including strengthening a largely underpaid, underdeveloped work force and conducting major repairs on several neglected facilities. Before the tax, an average of 20 to 30 nursing homes were closing annually from 1998 to 2002, according to Scott Plumb, senior vice president of the Massachusetts Senior Care Association.

The fee, Plumb said, wasn't an ideal solution to the problem, but it helped turn around a nursing home system that was in "dire straits."

Here's how it works:

The state assesses each nursing home $19.17 a day for each non-Medicaid patient, generating an estimated $220 million. In the past, the state took about $145 million raised from the user fee, doubled it and funneled it all into nursing homes throughout the Medicaid program. Since the federal government pays half of Medicaid expenditures, the state was reimbursed $145 million. On a net basis, nursing homes received an infusion of $145 million from federal taxpayers and those nursing-home patients paying for their own care. And the state paid nothing more.

Last September, the state increased the user fee by $75 million. But unlike the previous program, Gov. Deval Patrick's budget failed to fully pay the fee for Medicaid residents, Plumb said. Basically, out of the $19.17 bed tax, only $15 comes back into the system. This means nursing homes are falling back to the levels they were at in 2002, before the patient bed tax was instituted.

"Our position here, is we came up with a way to improve care in nursing homes and it worked," Plumb said. "Now it's in danger. The fee was raised but the state decided to use a portion of it and apply it elsewhere to solve their budget problem. Now we're worried the result will be another decline in services and more nursing homes closing."

State Sen. Susan Fargo, D-Lincoln, who voted against the user fee in 2002, said she was "horrified" to hear the fee increased by nearly $8 in the wake of less Medicaid reimbursement. "The real story is that everyone gets the money back except those people who pay their own way without relying on government programs," Fargo said. "By adopting this policy, it made our budget better but it's hurting the people who were singled out to bear the brunt of this tax."

-From “State increase in rates leaves patients in dire straits” by Rita Savard, The Lowell Sun, http://www.lowellsun.com/ci_14629938?IADID, retrieved 3/26/10 and “State Increase In Rates Leaves Patients In Dire Straits”, News from Margolis & Bloom, LLP - March 8, 2010.

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