New Avalere Health Analysis: New York Seniors' Medicare-Funded Nursing Home Care Reduced by $321.2 Million in FY 2012 Resulting From New Federal Nursing Home Regulation

New CMS Regulation Will Also Reduce New York State Economic Activity by $388.1 Million, Study Shows; New York Suffers 4th Largest Loss of Medicare-Funded Nursing Home Care Nationally

NEW YORK, Aug. 23, 2011 /PRNewswire-USNewswire/ -- A new analysis by Avalere Health finds that a new regulation recently issued by the federal Centers for Medicare and Medicaid Services (CMS) reducing Medicare-funded nursing home care by $79 billion over ten years nationally will result in a $321.2 million reduction for New York seniors' care in FY 2012, and correspondingly reduce New York state economic activity by $388.1 million in FY 2012 alone.

Alan G. Rosenbloom, President of the Alliance for Quality Nursing Home Care, which paid for the independent study, warned: "These new Medicare cuts will contribute to destabilizing New York State's second largest health facility employer and the substantial economic activity facilities generate at the state and local level from Long Island to Buffalo and everywhere in between." In attempting to correct an inadvertent overpayment to providers, the Alliance leader says the CMS regulation went well beyond the cautious correction urged by a bipartisan group of U.S. House and Senate members.

"Nursing homes 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 New York – are imposing significant financial strain on the sector. "In the long term, there is concurrence among policymakers that nursing homes 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." Said the President of the Healthcare Association of New York, according to the Times reporting: "It's not realistic to believe that we're going to continue to generate job growth when you're speaking about Medicare and Medicaid reductions in the hundreds of billions of dollars over the next five years."

Continued Rosenbloom: "The prospect of yet even more Medicare cuts stemming from Congressional Super Committee activity this fall would be devastating to nursing home patients, disastrous to local economies and caregiver jobs, and a historic setback to the health provider sector that offers high quality care and rehabilitation in a low cost setting." In New York State, nursing homes account for 197,414 jobs, with a total impact of more than $21 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, 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.

The Avalere study finds that while New York State is suffering the 4th largest loss of Medicare funding nationally as a result of the new federal regulation ($321.2 million for FY 2012), California ranks #1 with a loss of $664.1 million; Florida ranks #2 with a loss of $562.2 million; Texas ranks #3 with a loss of $497.1 million.

For complete top ten state Medicare cut/state economic loss breakdown, please see www.aqnhc.org.

SOURCE Alliance for Quality Nursing Home Care