New Avalere Health Analysis: OH Seniors' Medicare-Funded SNF Care Reduced by $275.1 Million Due to New Federal Regulation; State Jobs Instability Amplified

Ohio Seniors Suffer 6th Largest State Loss of Medicare-Funded Skilled Nursing Facility Care as President Obama Proposes Still More Federal SNF Cuts on Top of Recent Columbus Medicaid Reductions, AQNHC Announced Today

COLUMBUS, Ohio, Sept. 26, 2011 /PRNewswire-USNewswire/ -- A new analysis by Avalere Health finds that a new federal regulation recently issued by the Centers for Medicare and Medicaid Services (CMS) will result in a $275.1 million reduction for Ohio seniors' Medicare-funded Skilled Nursing Facility (SNF) care in FY 2012 -- the six highest cut nationally. This comes with the threat of yet another $42 billion national Medicare cut proposal from President Obama last week – and on top of the 5.8% state Medicaid cut recently passed in Columbus, prompting key state and national long term and post-acute care leaders to express deep concern about job losses and the escalating economic instability facing Ohio's SNF's -- the state's second largest health facility employer.

Peter Van Runkle, Executive Director of the Ohio Health Care Association (OHCA), said the cumulative impact of federal and state cuts on Ohio's SNFs and patient care will be job losses, staffing instability and the subsequent negative impact on care: "We are already beginning to see SNF job losses occurring within Ohio and I am deeply concerned this foreshadows far higher job losses and instability in the weeks and months ahead as Washington continues to pursue more federal spending cuts on top of others already taking hold."

Stated Van Runkle: "This is a bad situation that is getting worse – and elderly facility patients and their caregivers are at severe risk. My message to the Ohio congressional delegation is that cutting provider payments without impacting care quality and causing job losses is simply not possible." Van Runkle noted that OHCA is currently conducting a statewide member survey on job losses and will release the statewide results in the coming days.

Alan G. Rosenbloom, President of the Alliance for Quality Nursing Home Care, which paid for the independent study, noted: "The additional Medicare cuts proposed by the Obama Administration -- on top of the new CMS regulation, and on top of the state Medicaid cuts in Ohio -- will significantly contribute to further destabilizing the state's second largest health facility employer, and the substantial economic activity skilled nursing facilities generate throughout rural, suburban and urban Ohio."

"Skilled nursing facilities are operating in an extremely difficult environment," said Avalere CEO Dan Mendelson. While noting that in addition to reductions to Medicare payments, Medicaid challenges in states across the nation – including Ohio – are imposing significant financial strain on the sector. "In the long term, there is concurrence among policymakers that skilled nursing facilities hold the key to better patient management and cost reduction, but in the short term, these pressures on Medicare and Medicaid rates will be exceedingly difficult to manage," Mendelson continued.

The New York Times reported on 8/17 ("Cuts in Health Care May Undermine Role in Labor Market") that turmoil in the markets and government funding cuts, "has led many in the health industry to caution that it cannot be relied upon to keep hiring workers." Observed Van Runkle: "The prospect of still more Medicare cuts stemming from Congressional Super Committee activity this fall would be devastating to Ohio skilled nursing facility patients, disastrous to local caregiver jobs, and an historic setback to the health provider sector that offers high quality care and rehabilitation in a comparably low cost setting. Undermining the very health sector that is part of the answer to federal cost containment is unwise, unwarranted and unfathomable on a policy basis."

In Ohio, skilled nursing facilities directly or indirectly account for 162,863 jobs, with a total impact of more than $13.13 billion annually on state economic activity, according to a separate Avalere Health study released earlier this year.  In addition to being a key employer statewide, skilled nursing facilities are a leading provider of Medicare post-acute care services, treating nearly half of all Medicare beneficiaries who are discharged from hospitals to post-acute care.

While the Avalere study finds Ohio is suffering the 6th largest loss of Medicare funding nationally as a result of the new federal regulation, California ranks #1 with a loss of $484.3 million; Florida ranks #2 with a loss of $447.7 million; Texas ranks #3 with a loss of $349 million; New York ranks #4 with a loss of $321.1 billion; and Illinois ranks #5 with a loss of $296.8 million. (For complete top 10 state Medicare cut/state economic loss breakdown, please go to www.aqnhc.org).

SOURCE Alliance for Quality Nursing Home Care