New Avalere Health Analysis Details State Impact of "Bad Debt" SNF Medicare Funding Cuts

FL, OH, IL, PA, NC, LA, IN, TN, GA, NJ Skilled Nursing Facilities Take Biggest Medicare Funding Hit Resulting From Passage of Middle Class Tax Relief and Job Creation Act of 2012

WASHINGTON, April 3, 2012 /PRNewswire-USNewswire/ -- A new Avalere Health analysis detailing the negative impact on Skilled Nursing Facilities (SNFs) resulting from so called "bad debt" provisions passed in the Middle Class Tax Relief and Job Creation Act of 2012 finds facilities in Florida, Ohio, Illinois, Pennsylvania, North Carolina, Louisiana, Indiana, Tennessee, Georgia and New Jersey will absorb the largest Medicare funding cuts. Nationally, the provision will cut SNF payments by at least $3 billion over the FY 2012-21 budget window.

Alan G. Rosenbloom, President of the Alliance for Quality Nursing Home Care (AQNHC), pointed out that the phrase "bad debt" is a complete misnomer. The federal government itself, he said, prevents SNFs from collecting as much as 90 percent of SNF bad debt. "SNFs have no legal recourse to collect 'bad debt' from state Medicaid agencies -- and is more accurately described as 'uncollectible debt' as mandated by federal law," he stated. He noted the U.S. SNF sector, America's second largest health facility employer, faces yet another $8-9 billion in cuts between FY 2012-21, resulting just from the looming sequestration threat.

The following is the Top Ten State Impact on Medicare Payments to SNFs resulting from the "Bad Debt" Provision in the Middle Class Tax Relief and Job Creation Act (amounts in millions; methodology notes available at www.aqnhc.org; *Discrepancy due to rounding):

The Alliance leader pointed out the SNF sector is already slated to absorb another $48 billion in Medicare reductions between FY 2012-21, and that SNFs also remain disproportionately reliant on Medicaid as compared to other providers -- with Medicaid paying for 57 percent of patient days. The new Alliance Spring 2012 Care Context policy paper details the fact that within the past 12 months, 32 states have cut or frozen Medicaid funding for SNFs. Two highly problematic examples include Florida, which has cut Medicaid SNF funding by 5.8 percent, and, Ohio, which has cut Medicaid SNF funding by 6 percent.

According to the new Avalere analysis, Florida SNFs' Medicare funding will be cut $60.5 million (#1 nationally), and Ohio SNFs will be cut $30.5 million (#2 nationally). "While SNFs, their patients and their workforce have suffered a battery of funding cuts, Florida and Ohio facilities, especially, have taken a pounding in terms of cumulative state and federal funding cuts," Rosenbloom observed.

Moving forward on the policy front, Rosenbloom pointed out that SNFs play a key role in the post-acute care continuum, and are poised to play a still greater role if Congress acts to rationalize the nation's Medicare post-acute payment system. In a recent Inside Health Policy news article, Rosenbloom and Avalere CEO Dan Mendelson detail the need for coordinated governmental SNF funding policy to help achieve greater efficiency in Medicare spending and improve quality.

The Alliance for Quality Nursing Home Care is a coalition of 10 leading post-acute and long term care organizations providing Skilled Nursing Facility (SNF) care in approximately 1,400 facilities, in 44 states nationwide.

SOURCE Alliance for Quality Nursing Home Care