USA - Failure to recognize Medicare-Medicaid Funding: interdependence impedes ability to ensure quality nursing home care

Citation

(2007), "USA - Failure to recognize Medicare-Medicaid Funding: interdependence impedes ability to ensure quality nursing home care", International Journal of Health Care Quality Assurance, Vol. 20 No. 4. https://doi.org/10.1108/ijhcqa.2007.06220dab.010

USA - Failure to recognize Medicare-Medicaid Funding: interdependence impedes ability to ensure quality nursing home care

Keywords: Nursing homes, Patient care, Quality improvement, Resource management, United States of America

In a statement to the House Ways and Means Health Subcommittee today, the American Health Care Association (AHCA) said Congress should wholeheartedly reject the Medicare Payment Advisory Committee’s (MedPAC) recommendation of no annual inflation update for skilled nursing providers, and warned MedPAC’s ongoing failure to recognize the growing funding interdependence between Medicare and Medicaid could impede the recent quality gains of the profession.

“MedPAC’s exclusive focus on Medicare margins in the nursing home sector does a disservice to those frail, elderly and vulnerable individuals who receive care and services in America’s nursing homes, and by ignoring Medicaid operating margins, MedPAC’s analysis and recommendations do not present an accurate picture of the long term care marketplace”, stated Bruce Yarwood, President and CEO of AHCA.

“Medicaid is responsible for funding the care for 66 percent of patients in America’s nursing homes, and those nursing homes lose an average of $13 per Medicaid patient per day”, he continued. “MedPAC’s continuing and exclusive focus on Medicare ignores the real and growing interdependence between Medicare and Medicaid”.

Yarwood expressed disappointment that the Administration’s proposed FY 2008 budget incorporates MedPAC’s recommendations regarding the market basket adjustments for skilled nursing facilities, and said the proposed overall budget would cut Medicare funding for skilled nursing care by $10 billion over five years. “Cutbacks of this magnitude will threaten the progress we have achieved working with the federal government to improve care quality”, he said.

The AHCA President and CEO also said the Congressional Budget Office’s (CBO) new “Budget Options” report to Congress also warns that reducing update factors “might lead to certain patients having difficultly obtaining post-acute care”, and, “To the extent that patients faced limited access to post-acute care, they might either remain longer in a short-stay hospital, return home without receiving post-acute care, or be discharged to receive long-term care not covered by Medicare. By reducing the revenue of providers, this option might also limit their ability to provide high-quality care”.

Yarwood also stated that, “given the dramatic cost increases we face in key areas including labor, energy, liability and capital, this is wholly inadequate to maintain our quality gains, especially as these costs are generally influenced by factors beyond our control”.

For example, he observed, the shortage of nurses and other direct care workers coupled with the fact that long term care must compete with other employers both within and outside the health care sector for these employees, contributes significantly to increasing labor costs. In addition, we must adjust to the ripple effect that the minimum wage increase will surely have throughout our profession. “When operating margins are further reduced, we are far less able to recruit and retain qualified care givers, modernize and refurbish aging physical plants and equipment, acquire and implement new technologies to accommodate advances in medical practices, and meet the increasingly complex care needs of an aging population”, Yarwood continued.

Yarwood also stated, “It is a tragic public policy error for MedPAC to dismiss the Medicare-Medicaid ‘cross subsidization’ issue as irrelevant to the debate at hand – despite the fact it has specifically acknowledged this phenomenon in the past – which is certainly noteworthy”. On that basis, he continued, MedPac’s recommendations should be rejected, and he made the following recommendations:

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  Congress should reject MedPAC’s recommendations for skilled nursing providers, and should maintain the full market basket for FY 2008.

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  Congress should amend MedPAC’s charter to require the Commission to consider operating margins of all government payers and the adequacy of all government funding in making its recommendations. This approach will enhance economic stability and quality improvements.

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  Congress should require that MedPAC factor into its recommendations long term care’s progress in improving quality. Funding volatility undermines providers’ ability to remain focused on continuous quality improvement.

Said Yarwood in conclusion: “Mr Chairman, America’s seniors cannot afford another setback generated by the continuing failure in Washington to recognize the tangible, growing relationship between payment policies and quality objectives. Our recommendations concerning MedPAC offer an approach that avoids such a negative scenario, and properly prepares the nation’s long term care infrastructure for the challenging task ahead”.

Available at: www.ahca.org/news/index.html