Nursing home and long-term care facility providers call for higher Medicaid reimbursement

Thomas A. Barstow, Contributing Writer//July 8, 2022

Nursing home and long-term care facility providers call for higher Medicaid reimbursement

Thomas A. Barstow, Contributing Writer//July 8, 2022

Providers for nursing homes and long-term care facilities want Pennsylvania lawmakers to dramatically increase the state’s Medicaid reimbursement rate to support employee wages, workforce recruitment and operational costs and to do so before the state budget deadline at the end of June.  


Zach Shamberg, president and CEO of the Pennsylvania Health Care Association, said the pandemic shed light on serious problems facing older Pennsylvanians and the care they need. So, he is hopeful that bipartisan support from lawmakers will lead to an increase to $294 million from the $91 million recommended in Gov. Tom Wolf’s budget proposal.  


“We continue to hear a real recognition that this year may be the year to invest in long-term care,” Shamberg said, pointing to a state budget surplus and remaining federal money given to the state during the pandemic. “2022 may be the year to make a long-term investment in long-term care.” 


Budget process nearing end 


The budget process includes back-and-forth with lawmakers, lobbyists and stakeholders and is not final until legislators agree on a budget for the 2022-23 fiscal year and it is signed by Wolf, a Democrat. The deadline is July 1. In a May report, the Wolf Administration estimated that there could be at least a $3.3 billion surplus at the end of the 2022-23 fiscal year, if Wolf’s budget were to be approved in its entirety. 


“That surplus is on top of and entirely separate from the $2.87 billion that would remain in the state’s Rainy Day Fund and the $2.2 billion in American Rescue Plan funding that Pennsylvania must spend before 2024 or send back to the federal government,” according to the administration. 


Shamberg said that the surpluses make this the time to support better care for Pennsylvania’s elderly. Additional funding would be needed each year, so it would be a recurring expense request, to help ensure that providers are able to continually invest in higher wages, bonuses, and so-called “hero’s pay” or hazard pay that came about during the pandemic. It also would allow providers to meet operational demands and deliver care as the need for services increases, Shamberg added.   


Facilities that care for the elderly continue to struggle financially, he and others also pointed out. Shayna Varner, PHCA vice president of strategy, said that 11 facilities statewide closed from December 2019 to May 2022, not including the recent closure of Fox Subacute at Warrington in Bucks County. Citing two separate reports, PHCA said the situation is getting dire.  


“In a 2022 simulation, 57% of Pennsylvania nursing facilities—impacting nearly 90% of Pennsylvania’s counties—had an operating margin of -7.5% or less (reaching further into the negative), increasing alarm for more closures and residents at risk of losing care,” according to PHCA. “This simulation number is 10 percentage points higher than the national average, and a 35-percentage point increase from 2019. Nearly 75% of nursing facilities have an operating margin of -1.7% or less. The research also shows annual overall inflation has increased by 8.5% for nursing facilities, including 8.8% for food and 13.5% for energy services.” 


In a emailed response to questions, Elizabeth Rementer, Wolf’s press secretary, said the remaining federal money from the pandemic is being handled separately from the state budget process and that the proposals would call for one-time investments, not recurring charges.  


As for the state budget, Rementer said that the $91 million in the proposed budget is to support new regulations involving skilled nursing facilities. 


“This budget item is in support of implementing the Department of Health’s proposed nursing home regulations focused on increased quality of care for residents and workers,” Rementer said. “The current skilled nursing facility regulations have not been updated since 1999.” 


“It is important to note that the 2022-23 budget is still being negotiated and the proposed number is subject to appropriation through enactment,” she also said, adding that the public comment period remains open for the proposed regulations on skilled nursing facilities. “The administration stands ready to support the industry during implementation of the proposed changes. We understand these changes will not just impact residents and staff but will impact the way in which providers do business.” 


Next steps 


Shamberg said his organization has been working with both Democrats and Republicans and that support has been strong from both sides of the aisle for increasing the funding level to $294 million.  


“Each year it is a battle,” Shamberg said. “The difference is the last two years and the bright spotlight that was shone on long-term care. … We can’t afford to kick the can down the road for one more year. And what we are hearing is that long-term care is a priority.” 


He pointed to state House Appropriations Committee Chair Stan Saylor, R-York, as someone who has been following the issues closely. Efforts to reach Saylor were unsuccessful. But in an interview with the Associated Press earlier in June, Saylor, who lost his May primary bid for re-election, indicated that demands for extra money have been high.  


Shamberg acknowledged that there will be many competing interests for more funding but that his members, which include 400 long-term care and senior service providers, have a good case to make with lawmakers, partly because Pennsylvania has one of the oldest populations in the country. PHCA alone serves about 50,000 elderly and disabled individuals, according to PHCA.  


Other Support 


He also noted that his organization’s efforts have the support of other groups that serve the state’s older residents.  


“Providing quality care for those who are most vulnerable to COVID-19 continues to be an everyday struggle,” Garry Pezzano, president and CEO of LeadingAge PA, wrote in a column submitted to the Central Penn Business Journal. LeadingAge is a trade association representing more than 370 senior housing, health care, and community services in Pennsylvania. “The chronic underfunding of our nursing homes, coupled with the continued escalating costs of PPE, testing, wages and operational needs, has left many nursing homes and senior living communities with limited options—close, sell or limit capacity. That is why a meaningful investment in Medicaid is needed if our senior care communities are to not only survive but thrive.” 


Pezzano said that Wolf’s budget plan that calls for a $91 million increase in funding is “misguided.” He said that plan is tied to a proposal to increase minimum staffing thresholds by 50%. 


“Unfortunately, the staffing requirements are unrealistic because nursing homes simply don’t have the funding to either attract potential workers or hire more employees,” he also wrote. “Even if they did, the workforce crisis, which is impacting many industries, severely limits their ability to fill positions. One-size-fits-all staffing requirements also fail to recognize that each nursing home is unique in terms of resident care needs and characteristics of the building, among other things.” 


The Medicaid funding gap for nursing homes doubled from $631million in 2017-18 to almost $1.2 billion in 2018-19, he wrote. 


“This has been a devastating trend,” Pezzano said in advocating for the $294 million budget request that is supported by PHCA. “Medicaid funding is intended to cover long-term care costs for those who can no longer afford to pay for it. As one of the oldest states in the nation, Pennsylvania’s nursing homes care for one of the largest Medicaid populations in America.”  


The bottom line, Shamberg said, is that it will be up to state lawmakers to determine if such appeals lead to an increase. 


“It will ultimately come down to the priorities of the state legislature and the priorities of the Wolf Administration,” Shamberg said. 


Thomas A. Barstow is freelance writer and editor based in York