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American Health Care Association: Administration's Proposed FY 2007 Budget Cuts States' Ability to Access Key Medicaid Funding By 1.58B

Posted on: Wednesday, 1 March 2006, 12:01 CST

WASHINGTON, March 1 /U.S. Newswire/ -- A new analysis of President George W. Bush's proposed FY 2007 federal budget jointly conducted by BDO Seidman and the American Health Care Association (AHCA) finds states' ability to tap key Medicaid funds used to improve nursing home care quality will be cut by $1.58 billion, further hobbling state efforts to provide for the essential care needs of frail, elderly and disabled residents.

"As states across America struggle to control Medicaid costs while also ensuring their most vulnerable frail, elderly and disabled citizens maintain access to quality nursing home care, the proposed federal Medicaid cuts will make a bad situation even worse," stated Bruce Yarwood, president and CEO of AHCA. "This is yet another example where the federal government's funding priorities conflict directly with its stated goal of sustaining long term care quality improvement initiatives."

In place since the 1980s, 33 states and the District of Columbia currently have approval from the Centers for Medicare and Medicaid Services (CMS) to assess a quality fee on state long term care providers, also characterized as a "provider tax," to generate additional federal revenue to help fund states' share of Medicaid program costs. States utilize this revenue to plug shortfalls and more adequately fund quality long term care services for seniors and persons with disabilities, especially as it relates to staffing and coping with the rapidly escalating costs of providing care. States may now assess up to 6 percent of the revenue from providers and use that to obtain increased federal Medicaid matching funds. The Administration's federal budget proposal limits the assessment to 3 percent.

According to the BDO Seidman/AHCA analysis, seniors in the following 10 states will be most negatively impacted based upon the loss of federal funds imposed by the proposed FY 2007 federal budget:

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Lost Medicaid Funds:

Location; millions; (per patient per day)

United States; -$1,571.8; ($6.53)

1. Pennsylvania; -$167.0; ($8.18)

2. California; -$125.0; ($5.43)

3. New York; -$114.5; ($3.82)

4. Michigan; -$112.5; ($11.25)

5. Mississippi; -$88.0; ($15.43)

6. Missouri; -$84.9; ($9.54)

7. Indiana; -$74.3; ($7.74)

8. Louisiana; -$70.2; ($9.00)

9. Arkansas; -$66.1; ($15.43)

10. Oklahoma; -$62.0; ($13.20)

Note: Numbers for Michigan, Mississippi and Louisiana are preliminary estimates.

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Yarwood noted that BDO Seidman also undertakes an annual study to measure the shortfall between Medicaid payment to nursing home providers and the state's allowable nursing home costs. The results from 2002, representing over 86 percent of the Medicaid patient days nationwide, indicate the average shortfall in Medicaid reimbursement was $12.58 per Medicaid patient day -- meaning states pay providers $12.58 less than the actual cost of providing quality care and services per day. States use the quality fee to partially fund this growing disparity between care costs and actual governmental payments.

Likening the plight of the nursing home provider community to "walking on a treadmill while simultaneously sinking in quicksand," Yarwood acknowledged the quality fee is a temporary fix. "Until broader reforms are implemented that support and protect individuals who plan for their own long term care needs through private insurance and other means, we have a moral obligation to preserve Medicaid as a safety net program for those who truly need it, and we will not shy away from this basic, fundamental public policy objective and responsibility."

http://www.usnewswire.com

Source: U.S. Newswire

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