At Senate Finance Committee Hearing on FY 2013 Budget, Alliance for Quality Nursing Home Care Says U.S. Nursing Homes Slated to Absorb $127 Billion in

Medicare Reductions Between FY 2012-21

WASHINGTON, Feb. 15, 2012 /PRNewswire-USNewswire/ -- With America's skilled nursing facility (SNF) sector already slated to absorb $127 billion in Medicare reductions between FY 2012-21, the Alliance for Quality Nursing Home Care said concurrent to today's Senate Finance Committee hearing on the proposed FY 2013 budget that a phase-in of a 2011 Medicare regulation that reduced Medicare funding by 11.1 percent is critical to preserving quality nursing home care, and preventing additional facility job losses.

"Media reports that thousands of facility jobs have already been lost due to the immediate implementation of the CMS Rule warrants concern and action," stated Alan G. Rosenbloom, President of the Alliance. "The SNF community acknowledges that the Medicare payments in question require recalibration – yet should have been implemented over multiple years. We respectfully urge Secretary Sebelius, the Committee and Congress to support phasing-in this recalibration over three years to ease the negative impact on patients, facility job stability and our entire sector."

Rosenbloom also pointed out that based on a recent national Avalere Health survey of SNFs, the regulatory changes made on October 1, 2011, are projected to result in the loss of 20,000-25,000 SNF jobs, and could result in another 20,000-25,000 jobs not being created due to canceled facility expansions and renovations. He also noted that SNFs remain disproportionately reliant on Medicaid as compared to other providers.

"Within the past 12 months, 32 states have cut or frozen Medicaid funding for SNFs," Rosenbloom continued. "Because approximately 70 percent of SNF patient care is paid for by government programs, the combined impact of Medicare and Medicaid cuts has pushed overall SNF operating margins below one percent, the lowest of any health care sector."

Concluded Rosenbloom: "Our sector, the nation's second largest health facility employer, is increasingly concerned that any further direct payment reductions, including cuts in Medicare payments for bad debt, will significantly impact seniors' access to quality care, and could push a sector already in a precarious situation over the edge."

The Alliance leader pointed out that proposals to cut Medicare funding for SNF 'bad debt' ignores the key fact that 85 percent of SNF bad debt is unrecoverable because it stems from Medicaid's inability or unwillingness to pay Medicare co-payments for dual eligible patients.

"Medicare currently reimburses SNFs for 100 percent of bad debt from dual eligibles because federal law prevents SNFs from collecting these payments from beneficiaries, most of whom do not have the means to pay," concluded Rosenbloom. "At the same time, however, the law fails to require state Medicaid programs to pay either."

The Alliance for Quality Nursing Home Care is a coalition of 12 leading post-acute and long term care organizations providing quality skilled nursing care to American seniors and disabled in approximately 1,400 facilities in 44 states nationwide.

SOURCE Alliance for Quality Nursing Home Care

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