Thursday, March 19, 2009

Budget Woes Could Have Drastic Effects on Resident Care

Late last Friday (Friday the 13th), the Office of Economic & Demographic Research released the results of the General Revenue Estimating Conference held that day, lowering the expected General Revenue projections again. Projected General Revenue collections for the current Fiscal Year 2008-09 were $1.1 billion below the amounts used for the January Special Session, and projected General Revenue collections for Fiscal Year 2009-10 were reduced by an additional $2.3 billion. So, for Fiscal Year 2009-10, Florida is expected to have slightly less than $20 billion in General Revenue to spend. This amount compares to $27.1 billion available for the Fiscal Year 2005-06 budget period.

What this means is that after the funding of the minimal “must funds,” such as Medicaid workload and maintenance of effort, education, and prisons, the projected deficit for Fiscal Year 2009-10 is approximately $6.1 billion without consideration of Federal Stimulus funds. After application of the Federal Stimulus funds available to the state of Florida, the deficit is reduced to $3.1 billion. Given Florida’s constitutional mandate to have a balanced budget, the legislature will be charged with finding an additional $3.1 billion in additional cuts or revenue enhancements.

As a result, today the Senate Health and Human Services Appropriations Committee required each of the agencies for which they have jurisdiction to present options to achieve a 10% budget savings. Foremost among the options presented by the Agency for Health Care Administration was a proposal to reduce nursing home Medicaid rates by 12.1 percent, which equates to $357 million ($115.5 General Revenue) in reduced funding. This would equal approximately $22.75 per Medicaid patient day.

AHCA also included options to expand the Capitated Nursing Home Diversion Program by another 1,000 slots, saving $14 million ($4.5 million General Revenue), and the elimination of adult Dental, Visual and Hearing Services, saving $30 million ($9.6 million General Revenue).

Clearly draconian cuts of the nature being discussed would be totally devastating to our profession. Now is the time for FHCA members to let legislators know how difficult it is to survive the March Medicaid rate reductions of an average of $14.77 and what a cut of $22.75 per Medicaid patient day would do to your ability to care for Florida’s frail and elderly residents.

Of note, the proposed cuts would threaten the employment of over 10,000 nursing home workers and exceeds the entire amount of funding provided under the provisions of SB 1202, which increased Certified Nursing Assistant staffing from a regulatory requirement of 1.7 hours per patient per day to 2.9 hours per patient per day. How can providers be expected to maintain the quality of care improvements that have been made with such a loss in funding???

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