Pa. nursing homes brace for another round of state cuts

(Philly.com) Pennsylvania nursing-home operators, already hit hard by last year’s cuts in federal and state funding, face another revenue loss in Gov. Corbett’s proposed budget for the fiscal year starting July 1.

The budget proposal, released Tuesday, calls for a 4 percent cut in the Medicaid reimbursement rate for nursing homes. The total revenue loss for nursing homes is projected by the Pennsylvania Health Care Association to be $46.5 million.

That amounts to a nearly $8-per-day reduction in the average daily reimbursement of $194 for Medicaid patients, the Harrisburg trade group for nursing-home operators said Wednesday.

Already, nursing homes are losing $19.23 on each day of care provided to a Medicaid patient under the current budget, up from a per-day loss of $15.13 the previous year, the group said.

“I think you will see some providers get into financial trouble. I think you’ll see some providers cutting down on hands-on care,” said Scott Rifkin, founder and president of Mid-Atlantic Health Care L.L.C., a Timonium, Md., company that last year bought five nursing homes in Philadelphia for $75 million.

Corbett’s proposed Medicaid cuts also affect hospitals and other health-care providers, but the direct impact is not clear.

“We are still trying to understand the cuts. There are many pieces that have implications for hospitals,” said Priscilla Koutsouradis, communications director for the Delaware Valley Healthcare Council, which represents hospitals in the region.

For the nursing-home industry, the calculations are not quite so complicated.

“Pennsylvania’s Medicaid program covers about two-thirds of residents in the state’s nursing homes,” said Stuart Shapiro, president and chief executive of the Pennsylvania Health Care Association.

In Philadelphia, that figure is even higher – 75 percent. In nearby counties, the percentage of nursing-home residents on Medicaid ranges from 49 percent in Chester County to 64 percent in Delaware County.

Nursing homes are already contending with a significant cut in Medicare reimbursement rates that took effect Oct. 1, trimming as much as 18 percent from the federal program that homes counted on to break even, given their losses on Medicaid.

Nancy Kleinberg, co-owner of Park Pleasant nursing home in West Philadelphia, said the Medicare cuts resulted in a $380,000 reduction in revenue.

“That was before any state cuts,” said Kleinberg, whose father founded Park Pleasant in 1947.

Kleinberg said she and her sister, the other owner, were fortunate because they don’t have a mortgage. That gives them a bit more flexibility than some operators have.

“The issue isn’t: Can you cut costs? Everybody can cut costs. The issue is: Can you cut costs and provide quality care?” Kleinberg said.

Cutting aid to elderly poor who rely on Medicaid is a relatively “easy thing to do,” she said. “Their need is so great, but their voice is so small.”

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