Nursing Home Resident Care Faces Hit from Funding Cut ‘Perfect Storm’

Combination of Medicaid Cuts and Medicare Cuts Will Threaten Seniors’ Quality of Care, Caregiver Jobs

The Executive Director of the Florida Health Care Association (FHCA) warned that new federal Medicare cuts to Florida nursing homes amounting to $1.2 billion over 10 years contained in health care reform will threaten quality of care and quality of life for the nearly 71,000 frail elders who rely on their care. Combined with cuts to Medicare-funded nursing home care that went into effect October 1, 2009 - $895.8 million for Florida over the next 10 years - and the Florida Legislature’s proposed annual Medicaid funding cuts - $200 million in the Senate and $133 million in the House – these deep cuts will significantly endanger Florida nursing home residents’ care and jeopardize the state’s already fragile economy and caregiver jobs base.

“Nursing homes and the seniors under their care face an unprecedented ‘perfect storm’ funding threat from combined federal Medicare and state Medicaid cuts to nursing home care,’” said J. Emmett Reed, Executive Director of the Florida Health Care Association, the state’s first and largest advocacy organization for Florida long term care providers. “Legislators must understand that Medicare and Medicaid funding are inextricably linked, and the combination of cuts squeezes local facilities in a way that could harm seniors’ care, impact caregiver jobs and be detrimental to local economies.”

In the year 2010 alone, Florida’s Medicare cuts amount to $78.4 million – the 2nd highest level of cuts in the nation – as a result of federal regulatory cuts that went into effect October 1, 2009. The estimated economic impact on Florida in the year ahead, according to an analysis from the American Health Care Association (AHCA) and the Alliance for Quality Nursing Home Care, will be a reduction of $132.2 million in business activity, a reduction of $65.9 million in labor income, and a loss of 1,960 jobs. These cuts don’t take into account the $1.2 billion in cuts to Medicare-funded nursing home care that is included in health care reform signed into law today by President Obama.

Approximately 20 percent of nursing home residents rely on Medicare to pay for their nursing home care, while nearly 60 percent of residents rely on Medicaid. Medicare funding is critical to nursing homes because it supplements inadequate Medicaid payments. On average nursing homes lose $9.91 a day, or just over $225,000 a year in caring for Medicaid residents.

Continued Reed: “Having suffered a massive Medicare funding cut this past October of up almost $900 million over the next 10 years – distinct and separate from the reductions our sector has willingly and cooperatively agreed to shoulder as part of achieving broader health care reform – we are alarmed that the sheer size of the cumulative Medicare and Medicaid funding cuts we ultimately suffer will be especially damaging to seniors in Florida, where our Medicaid program is already underfunded.

Reed noted that Florida nursing homes are seeing an increasingly diverse patient base, and providing a greater variety of acute care, rehabilitative and convalescent services that cannot be delivered elsewhere – care services which are now in jeopardy due to the combined Medicaid/Medicare funding cuts. These massive funding cuts, Reed said, will undermine facilities’ ability to effectively treat this more medically complex patient population, and also put the jobs of the direct care workforce they depend upon in substantial danger, since nearly 70 percent of nursing home costs go toward people – salaries and benefits of the caregivers and other key staff vital to the quality of care and quality of life for residents.

“Maintaining Medicaid funding for nursing homes has become even more urgent as a result of the Medicare cuts that went into effect in October and those we will experience as a result of health care reform. The combination of cuts will significantly reduce the resources available for nursing home care at a time when residents have more medically-complex needs than ever before and the demand for access to that care continues to grow with our state’s aging baby boomer population,” said Reed.