In short order, Iola nursing homes and residential care facilities should be floating a little higher financially, thanks to a new law signed Tuesday by Governor Mark Parkinson that aims to restore both a 10 percent reduction in Medicaid payments to the homes and reinstate an annual inflationary-based raise in such payments.
The money for the payments will come from a new tax on all nursing home beds.The hope is the new bed tax will allow the agencies “to get more money from the federal government,” said Joe Benter of Iola Nursing Center.
“The state would tax the nursing home, and more money would flow into the federal system, then the state (is) supposed to pass that back down to the nursing homes,” he explained.
Benefit to the homes is dependent on their size, with those having more Medicaid beds receiving a greater proportion of funds.
Smaller facilities, those with 40 beds and under, would be exempt from the tax, said the bill’s author, Rep. Bob Bethell, R-Alden.
Although the law is official as of today, for larger providers, one provision — reimbursing the funds that had been reduced between Jan. 1 and June 30 — will not be implemented until approved by the federal Centers for Medicare and Medicaid Services, said Barbara Conant, director of public affairs for the Kansas Department on Aging. “We are still in the early stages of preparing our request to CMS,” she noted.
However, with more than 30 other states already having such a tax, “There’s really no reason they shouldn’t approve it,” noted Kansas Health Institute Senior Writer Dave Ranney of the funding mechanism.
ACCORDING to the language of House Bill 2320, each licensed bed would be charged $1,950 annually for three years. The fourth year, the tax will be reduced 40 percent, then expire unless renewed by lawmakers.
Funds would flow to the state, who would then reapportion them to each facility based on its Medicaid caseload, Ranney said.
“I’ll believe it when I see it,” was Benter’s response.
Still, he noted, any restoration of payment is better than nothing.
Windsor Place should realize a $160,689 benefit per year from the new law. Iola Nursing Center should see its revenue bumped up by $100,914 according to data provided by Conant.
Fountain Villa and Tara Gardens will see their Medicaid payment rate restored to 100 percent, rather than 90 percent, but will not be reimbursed for previous cuts, Bethell noted.
Nursing homes with a large number of Medicaid patients were hard-pressed by the 10 percent cut, Ranney acknowledged. Some struggled to stay in business, he said.
Iola administrators concurred.“That cut drastically hurt us,” said Peggy Strong, executive director of Tara Gardens residential care facility. “The state barely gives you enough money to survive on, to make payroll.”
Half of Tara’s beds — 11 of 22 — are occupied by Medicaid patients.
MEDICAID pays a flat per bed rate to each nursing home, based on the number of Medicaid clients they house and the type of care provided those individuals.
At Tara, losing funds on half their beds was critical. They had something of a safety net, however, in that Humboldt’s Arrowowod Lane is owned and administered by the same company, Strong said. There, only five of the 22 beds are Medicaid-paid.
“One building covers the other,” Strong said. But, “We’re just robbing Peter to pay Paul.”
As the health care crisis worsens and costs continue to skyrocket, “more and more people are going to state assistance,” Strong noted. “We’re even seeing more of our private pay go that way.”
It’s the same elsewhere.
“It crippled us,” Jody Monsour, owner/operator of Fountain Villa said of the reduction implemented earlier this year. “They called it a 10 percent cut, but basically they didn’t pay us what they owed.”
Monsour noted he receives only $38 a day from Medicaid to cover one patient. “We take her to the hospital. We give her all her medications. I’m basically giving her care for free,” he said of the payment that doesn’t cover the cost of staff time provided.
Not only that, Monsour noted, but “the state has doubled every (annual) fee you would pay to them. My licensure — which normally runs $400 — went to $800. My bed fees went from $600 to $1,200.”
Liability insurance was even worse, he said. “My insurance liability went from $35 to $500 per bed,” Monsour said.
“At the same time,” he said, “all the services were cut. All the departments were cut. All the people who I used to confer with for information were cut. It’s really getting bad out there.”
Hopefully, Monsour conceded, restoring the 10 percent cut will be enough.
“When I take a Medicaid patient, I look at their plan of care,” he said. What sort of care does the client need? What medications? All are written up in the plan, Monsour said. Then, “The state looks at what (the individual) can afford to pay — that’s called the client obligation.” Medicaid is supposed to pay the balance between the cost of care and the client’s ability to pay.
“There’s sometimes I can’t take them,” because the reimbursement rate is too low, he said.
MEDICAID payments are “a per diem that is established quarterly,” Benter explained. He said that care costs sometimes increase before the Medicaid payment is adjusted. If a patient needs more intensive care before the next quarterly adjustment, the nursing home must cover that care on its own.
The per diem is set for the entire facility, not adjusted per client, he noted.
Medicare — a federal program which covers anyone over 65 — “is considered skilled care — that’s reimbursed at a higher rate,” Benter said, while funding for Medicaid, which covers the poor and the disabled, “is through the state,” he said.
There are no Medicare patients at Iola Nursing Center. Of 37 filled beds, 24 are Medicaid clients; 12 beds are empty.
Fountain Villa has 17 residents. Ten of those are Medicaid clients. There are 20 beds total.
Previously, Monsour noted, his Medicaid load was less than 25 percent. “Now we’re at 50 percent. People we had who were self-pay have slid into Medicaid as they’ve used up their resources.”
Statewide, a 55 percent Medicaid caseload per nursing facility is the average.
“Medicaid is going to be a necessity (for more individuals) as prices rise and insurance covers less” Monsour noted.
“I’m starting to get 40-year-olds in my place — it’s scaring me.” Younger patients may have drug abuse or obesity issues that disallow them from living on their own, Monsour said.
“Medicaid has to cover them” if they cannot afford to pay for their own care, he said.
At Windsor Place, half of the 52 clients are supported by Medicaid, noted bookkeeper Charleen Merriman. There are a total of 60 beds available at the skilled nursing home, she said.
To deal with the reduced reimbursement earlier in the year, “we actually cut (staff’s) rate of pay,” Merriman said. It was that or cut positions, she observed.
To survive, Benter said, “You just try to run as lean and tight a ship as possible. Staffing is the least flexible. You look at food and recreation” when needing to cut costs. “You have to be creative.”
