Medicare reimbursement will be increased by 10.3%, the federal government said. The industry has struggled.
Saturday, July 28, 2001
By Josh Goldstein
INQUIRER STAFF WRITER
The federal government said it would boost Medicare payments to nursing homes by 10.3 percent starting Oct. 1 to an estimated $14.2 billion next year.
The Centers for Medicare and Medicaid Services, the federal agency formerly known as the Health Care Financing Administration, said late Thursday that, under the new rates, nursing homes would be paid as much as $550 a day to treat Medicare beneficiaries requiring the highest level of care.
"These increases in payments to the nation's skilled nursing facilities will allow them to continue to provide quality care for critically ill elderly and disabled Medicare beneficiaries," Tommy G. Thompson, secretary of Health and Human Services, said in a statement.
Industry officials were still trying to determine the effect of the rate increases yesterday, but cautioned that they did not represent a major change.
"This is not a huge new increase. It is really just a minor adjustment for inflation," said Alan DeFend, a spokesman for the American Health Care Association, a Washington group that represents nursing homes. "This restores, to some extent, the funding that was removed in the late '90s from the Medicare program."
Because Medicare accounts for only 8.7 percent of nursing-home revenue, industry officials said the overall effect would be muted on an industry that has struggled financially for the last three years.
Medicaid pays for 67.7 percent of nursing-home care, with the remainder coming from private insurers, charity care, and residents and their families.
The new rates implement legislation passed by Congress over the last two years in response to higher-than-anticipated Medicare cuts resulting from the Balanced Budget Act of 1997.
"It is certainly a step in the right direction," Rep. Joseph M. Hoeffel 3d (D., Pa.) said. "Poor funding levels clearly make it hard for nursing homes to provide the constantly high quality of care we expect."
Hoeffel, whose congressional district includes most of Montgomery County, said he expected to cosponsor legislation next week to ensure that nursing homes also get more from Medicaid. Funding of Medicaid is split between the federal government and the states.
Hoeffel released a report this week that found that more than half of the nursing homes in his congressional district had quality-of-care problems.
Even as he works with nursing-home operators to increase reimbursements, Hoeffel said quality must improve. "They can't blame low reimbursements for all of the quality-of-care problems that exist," he said.
Nursing homes have struggled financially since the federal government cut Medicare and Medicaid payments in the Balanced Budget Act of 1997.
In the last two years, five of the nation's largest nursing-home companies have filed for bankruptcy, including Genesis Health Ventures Inc., of Kennett Square.
A Genesis spokeswoman, Lisa Salamon, said the company could not estimate the effect of the rate increase until details were released next week.
Still, "This is a positive sign that shows the Bush administration recognizes there is a problem," she said.
Josh Goldstein's e-mail address is email@example.com