TOPEKA, Sept. 10 — The for-profit nursing home lobby has targeted the districts of 21 U.S. House Democrats, including freshman Kansas Congresswoman Nancy Boyda, with a newspaper ad campaign blasting the representatives for their recent votes to reauthorize the State Children’s Health Insurance Program.
Nursing home lobbyists say if HR 3162 survives intact it would cut Medicare payments to nursing homes by $2.7 billion over the next five years of which Kansas’ share would be $22 million.
The U.S. Senate and House have each approved significantly different versions of an SCHIP bill. The Senate version does not include the Medicare provisions considered harmful by the nursing home industry.
A conference committee to negotiate differences between the two bills has not yet been appointed, but Congress faces a Sept. 30 deadline for reapproving or extending SCHIP, which provides health insurance to millions of children nationwide, including 35,000 in Kansas. The House version of the bill is called CHAMP or the Children’s Health and Medicare Protection Act.
“What we don’t like about CHAMP is that we’re all for extending SCHIP — we just don’t think Medicare payments should be slashed to pay for it,” said Cindy Luxem, executive director at the Kansas Health Care Association, which represents for-profit nursing homes. “We don’t think it’s right to pit seniors against children.”
The Kansas Health Care Association is a chapter of the American Health Care Association, which joined with the Alliance for Quality Nursing Home Care to run a full-page ad Aug. 31 in the Topeka Capital-Journal newspaper.
The ad posed the question: “Why would politicians in Washington vote to cut Medicare for Kansas’ most vulnerable citizens.”
The ad urged readers to call Boyda’s office and “Tell her to STOP THE CUTS and to STAND UP for the quality skilled nursing care Kansas seniors need.”
“The ad is flatly untrue,” said Thomas Seay, a Boyda spokesman. “The bill maintains current funding levels.”
But nursing home officials said holding spending steady for the program is the same as a cut because it eliminates scheduled cost of living increases used to pay nursing home workers.
According to the Alliance for Quality Nursing Home Care, similar cuts in Medicare payments in the late 1990s put 20 percent of the nation’s nursing homes out of business.
The alliance represents 17 of the nation’s largest for-profit nursing home chains.
“When labor accounts for 75 to 80 percent of your operational costs and you’re told you’re not going to be getting a cost-of-living increase, it’s going to be very difficult to make ends meet,” said Donna Doneski, a spokeswoman for the American Health Care Association.
But Seay said Boyda’s vote was in keeping with the recommendations of the Medicare Payment Advisory Commission, which in March concluded that payments to nursing homes consistently exceed their costs.
A spokeswoman for the Medicare Payment Advisory Commission declined on-the-record comment this week but confirmed the commission had not recommended an increase in Medicare payments to nursing homes.
She provided KHI News Service with a copy of the recommendation.
The 17-member Medicaid Payment Advisory Commission is an independent federal panel charged with advising Congress on issues affecting Medicare.
Among the commission’s findings:
• In 2007, Medicare payments to nursing homes are expected to exceed their Medicare-related costs by 11 percent.
- For one-fourth of the nation’s nursing homes, Medicare payments exceeded costs by less than 4.7 percent in 2005. But one-half enjoyed margins of 15.5 percent or more.
- For one-fourth of the homes, payments exceeded costs by “nearly 25 percent or more.”
- For-profit homes did better than nonprofit homes with payments exceeding costs by 18 percent or more. Half of the non-profit homes had margins of 9 percent or less.
“Rather than padding the nursing home industry’s already high profit margins,” Seay said, “the congresswoman voted to spend those same health care dollars on improving access to rural health care, providing free preventative care to all Medicare beneficiaries, and reauthorizing SCHIP.”
The bill also derails plans for a 10 percent cut in Medicare payments to physicians.
Seay said the ad generated about 60 calls to Boyda’s office.
Medicare pays for rehabilitative stays in nursing homes — for example, an elderly Kansan who is recovering from a stroke or broken hip but is likely to return home. These Medicare-funded stays are limited to 100 days.
Medicare does not pay for stays for residents not expected to return home. Residents or their families are expected to pay in those circumstances. After a resident’s assets are depleted, Medicaid will pay for their stays.
“Inefficient and imprudent”
Doneski said the Medicaid Payment Advisory Commission’s findings tell only part of the story.
“The problem with the commission’s recommendations is their scope — the commission is limited to only looking at Medicare and not at long-term care overall,” Doneski said.
Nursing homes, she said, routinely use their higher-than-cost Medicare payments to offset their Medicaid losses.
“Eighty percent of the people in long-term care are either Medicare or Medicaid,” Doneski said. “Two-thirds (of the 80 percent) are on Medicaid and no one is going to argue that Medicaid doesn’t underfund long-term care.”
A freeze on Medicare payments, she said, will add to nursing homes’ Medicaid losses, jeopardizing their solvency.
The numbers she cited were national in scope. According to the Kansas Department on Aging, Medicaid pays for 56 percent of the state’s nursing home stays, Medicare pays for 7 percent.
The Medicare Payment Advisory Commission’s report addressed the nursing homes’ practice of using Medicare gains to offset Medicaid losses.
“They called it inefficient and imprudent — those are their exact words,” Seamy said. “It was their contention that additional funding wouldn’t help facilities with high percentages of people on Medicaid and that it wouldn’t address the state-by-state disparities in Medicaid payments.”
The debate over Medicaid shortfalls, he said, rests with the states because they decide how much nursing homes are paid.
Medicaid is a blend of state and federal funds. The federal government matches whatever a state is willing to spend.
In Kansas, the federal government puts up 60 cents for every 40 cents spent by the state.
Bill has support
The bill has earned the ire of the for-profit nursing home industry, but has been endorsed by the American Medical Association and AARP.
“We support the bill,” said Mary Fritsch of AARP Kansas. “We think it will improve access to doctors — that’s a key issue for us — it raises the level of assets a person can have and still be eligible for Medicare Part D assistance programs, and it will strengthen SCHIP for kids.”
Other provisions in the bill would:
- Drop penalties for late enrollment in the Medicare Part D prescription drug program;
- Remove Medicare co-pays for preventive care;
- Cover additional screenings for glaucoma, diabetes and cancer.
“If you look at the bill as a whole, it’s a significant gain for seniors,” said Edwin Park of the Center for Budget and Policy Priorities. “We see it as a win-win for seniors and for children.”
Debra Zahra, executive director at the Kansas Association of Homes and Services for the Aging, which represents nonprofit nursing homes, said she’d rather the ad had not run.
“That wouldn’t have been our approach,” she said. “We’d rather advocate for right policy for the right reasons — not drive a wedge between generations.”
Zahra warned that while Medicare Payment Advisory Commission data show some nonprofit nursing homes’ Medicare payments exceeding costs by 9 percent, “that’s certainly not the case in Kansas. Oh, my, no, we’re closer to half that.”
Zehr said recent Centers for Medicare and Medicaid Services projections showed nursing home costs increasing 3 percent over the next year.
“So here we have CMS saying our costs are going up and Congress saying it’s going to freeze our payments,” she said. “There seems to be a disconnect.”
Dave Ranney is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at dranney@khi.org or at 785-233-5443, ext. 128.
