Nursing Home Operators Frustrated by Medicaid Cuts

The Department of Health and Human Services has proposed strategies to cut Medicaid costs in an efforts to reduce a $175 billion budget cap across the 50 U.S. states. According to a recent report from McKnight’s Long Term Care News, Health and Human Services Secretary Kathleen Sebelius is suggesting an alternative to lifting requirements that states maintain Medicaid eligibility equal to that prior to implementation of the healthcare reform law. Sebelius suggests that changes can be made to states’ optional Medicaid benefits programs without a federal penalty. Medicaid budget gap could impact nursing homes

Such programs totaled just $100 billion in 2008, far short of the $175 billion budget defecit, although Sebelius notes that the changes she’s suggesting would reduce costs without merely slashing benefits for millions of Medicaid-eligible citizens. In light of dire shortages, many states are proposing ideas that could help reduce costs, but in many cases, these suggestions are being met with opposition from the nursing home industry. For example, Rhode Island Governor Lincoln D. Chaffee (R) has suggested reimbursing nursing homes based on services rendered, rather than the standard per-diem rate. While this measure would save $12.8 million, it would have a devastating effect on nursing home staffing, per James P. Nyberg, Director of LeadingAge RI. reports on some unusual ideas state leaders are fielding as possible cost-cutting solutions. For instance, in response to a public request by New York’s Medicaid director, a slew of emails suggested eliminating payments for routine circumcisions. Other possibilities are more logical, such as California’s recent proposal to pay for automated medication dispensing systems in Medicaid recipients’ homes beginning in July, a measure that will save $140 million each year.

While Medicaid doesn’t cover assisted living care in some states, significant budget shortages could certainly impact the assisted living industry over the long term. What are your thoughts on reducing Medicaid budget defecits in a manner that wouldn’t negatively impact the quality of care?

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