In Run-Up to VP Debate, Both Parties' Proposed Changes to Medicaid-Funded Nursing Home Care Questioned

"No Doubt" Administration and House GOP Proposals to Lower Medicaid Provider Tax Threshold Will Threaten Nursing Home Patients, AQNHC Warns

WASHINGTON, Oct. 10, 2012 /PRNewswire-USNewswire/ -- In the run-up to the Vice-Presidential debate between Joe Biden and Paul Ryan, where health care will inevitably be a central focus of discussion, the Alliance for Quality Nursing Home Care today released a new issue brief warning proposals by both the Obama Administration and House GOP to lower states' so-called "provider tax threshold" will threaten nursing home patient care and threaten key front line staff jobs in the midst of 40 states having already frozen or cut Medicaid-funded nursing home care since 2009. Nursing homes are technically referred to as Skilled Nursing Facilities (SNFs).

"Just as there is no doubt healthcare will be a major topic of the Vice-Presidential debate, there is no doubt that both parties' proposals to lower the Medicaid provider tax threshold will threaten nursing home patients and the jobs of their key frontline caregivers," said Alan G. Rosenbloom, President of the Alliance for Quality Nursing Home Care (AQNHC). "With 80 percent of our patients dependent upon Medicare or Medicaid funding for their care, nursing homes, especially, are highly sensitized to the cumulative negative impact of Medicaid cuts at the state level and Medicare cuts from Washington."

Background: According to the new Alliance issue brief, federal law allows states to use provider-specific tax revenues to help pay for the state's share of Medicaid funding. The amount of such revenues that can be rebated to providers is capped at no more than 6% of net patient revenues. States have disproportionately relied on provider taxes for skilled nursing facilities (SNFs) to fund their Medicaid programs as compared to other Medicaid providers. In addition, substantially more SNF provider tax programs operate at or near the 6% federal ceiling than those for other providers. In FY 2012, for example, 41 states and the District of Columbia used nursing home taxes, with 20 states operating at the 6% ceiling. 

Proposed Policy Changes: House Republicans have proposed reducing the threshold from 6% to 5.5% in 2013, cutting $11.3 billion in payments to all providers over 10 years; The Administration has proposed reducing the threshold from 6% to 3.5% over three years, cutting $21.8 billion in payments to all providers over 10 years. The lion's share of such cuts, however, will likely be borne by SNFs, according to Rosenbloom and the Alliance.  

Policy Recommendation: "Until such time policymakers develop and implement alternative mechanisms to assure that states provide sufficient Medicaid payments to nursing homes, neither proposal to reduce the Medicaid provider tax threshold should be implemented," Rosenbloom said. "In addition to $65 billion in Medicare payment reductions between FY 2012 and FY 2021 as a result of cuts already made, SNFs face the possibility of billions more in Medicare cuts over the next decade due to deficit reduction proposals."

Concluded Rosenbloom: "Rather than enacting repeated cuts to government funding programs, we urge both parties to work together to rationalize the payment system for post-acute and long-term care by enacting thoughtful, bold reforms that would ultimately benefit patients, caregivers, providers and taxpayers."

Issue Brief available at www.aqnhc.org

Contact: Ellen Almond
703/548-0019

SOURCE Alliance for Quality Nursing Home Care