Nursing home industry fears pending Medicaid cuts

A Republican-controlled House is unlikely to extend the enhanced Medicaid funding for states in last year's Recovery Act, the head of a nursing home trade association said Monday. A return to the initial federal share (known as FMAP) would be particularly painful for nursing homes and assisted living facilities, who rely on Medicaid to pay about two-thirds of their patients' bills.

"I just have a very hard time" seeing Republicans pass an FMAP bill, said Bruce Yarwood, president and CEO of the American Health Care Association.

Yarwood said the FMAP situation will force a discussion on long-term care, which he said was hardly addressed during the healthcare reform debate. As lawmakers respond to voters' concerns about the deficit and cut back on Medicaid and Medicare, a long-term care sector that relies on government spending to cover about 85 percent of its patients faces a crossroads.

"We stick out like a giant target because of the deficit problem," Yarwood said.

The healthcare reform law did create a voluntary contribution program known as the CLASS Act, but Yarwood said that while he hopes it works, it's still untested and few businesses have signed up so far to enroll their employees. And some Republicans want to repeal the provision out of concerns that it could turn into another entitlement program if beneficiaries' contributions can't cover its costs.

To address the industry's funding challenges, Yarwood said, AHCA has reached out to the Centers for Medicare and Medicaid Services and the Brookings Institution to create pilot programs where the federal government would reimburse providers based on the "condition, needs and characteristics of the patient rather than the post-acute care setting."

AHCA is also lobbying to get technical changes to Medicare payments in the physician payment bill that Congress will have to take up during the lame-duck session to prevent a 30 percent cut in Medicare payment rates. AHCA's other priority in that so-called "doc fix" bill will be passage of a year-long exemption from reimbursement caps on physical, speech/language pathology and occupational therapy services, which were capped at $1,860 each for 2010.

Yarwood added that, even if enhanced Medicaid funding is off the table next year, AHCA would still fight for a continuation of a provision in the Recovery Act requiring states pay most claims within 30 days.