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Gradual phase-in of Medicare regulation is logical
With the nation’s skilled nursing facility (SNF) sector already surviving on the lowest operating margins of all provider groups, facing $127 billion in Medicare funding cuts in the FY 2012-21 budget window, and reeling from a deep 11.1-percent Medicare funding reduction that went into effect late last year, facility job losses now occurring places the well being of seniors in clear and present danger.
The sheer weight of the federal Medicare funding pressures put on a sector where three of every four patients’ care is government-funded -- combined with state Medicaid cuts -- has destabilized America’s second largest health facility employer to an extent not experienced in more than a decade. Today’s economic stress on SNFs, more commonly known as nursing homes, is increasingly reminiscent of the 1997 Balanced Budget Amendment (BBA) aftermath, where facilities across the nation were forced to close. Some providers were even driven into bankruptcy, creating access issues for seniors seeking intensive post-acute rehabilitative SNF care.
In particular, the recent 11.1 percent Medicare funding reduction imposed by the Centers for Medicare and Medicaid Services (CMS) has resulted in too much of facilities’ key Medicare resource base being removed from the funding stream too quickly. The regulation-reducing Medicare rates also made substantial changes in payment methodology for therapy services performed in the SNF setting. It was intended to address what CMS said was a government overpayment to providers in the midst of instituting a new, complex Medicare payment system.
Equally significant, many of those losing their facility jobs are the very direct care workers integral to patient outcomes, and who perform upwards of 70-80 percent of direct patient care. These key facility staff, Certified Nurse Aides, are the backbone of every facility. When CNAs are lost, quality care is placed in direct jeopardy. As approximately 70 percent of facilities’ total operating costs are staffing related, economic reality cannot simply be pushed aside, ignored, or conveniently left for another day.
Ohio – where state Medicaid funding was cut 5.8 percent last year – unfortunately represents ‘ground zero’ in terms of how the 11.1-percent Medicare cut is wreaking havoc with facilities’ staffing. As the Ohio media has reported that 3,000 workers have been laid off in some 333 facilities throughout Ohio due to the cumulative funding squeeze, we are deeply concerned the crisis here represents the leading edge of a deleterious national trend. Florida, like Ohio and several other states, has also suffered significant state Medicaid cuts or freezes, and the pressure on SNF jobs and patient care will become more problematic as 2012 progresses.
As Congress reconvenes to tackle a rigorous legislative agenda, among our most important policy priorities on behalf of our patients and the caregivers who serve them is to help soften the sudden shock associated with the 11.1 percent Medicare reduction. A gradual phase-in of the federal regulation is a logical, fair and responsible policy option that has precedent with other providers experiencing momentous challenges with new government payment systems. Moreover, a phase-in can help alleviate a worsening direct care job loss crisis, and the risk it poses to lawmakers’ most vulnerable constituents.
Alan G. Rosenbloom is president of the Alliance for Quality Nursing Home Care, 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.
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