Medicaid cuts threaten nursing home reforms, advocates say

by | Aug 10, 2012

From: Chicago Tribune

The $1.6 billion in Medicaid cuts passed by state lawmakers angered a key legislator and some advocates who contend the legislation will undercut nursing home reforms enacted two years ago and delay improved care in the facilities.

But state officials said the 2010 reforms remain intact and added that they are pressing forward on measures to reduce violence and lift the quality of care for indigent patients.

As part of a series of compromises last week, nursing home operators agreed to a reduction in their Medicaid reimbursement rate, and state officials set a level of care by registered nurses that was lower than what many advocates had hoped for, according to Gov. Pat Quinn’s senior health care policy adviser, Michael Gelder.

That agreement — crafted behind closed doors by top state officials and nursing home industry representatives — angered state Sen. Jacqueline Collins, D-Chicago, who called it “totally unacceptable.”

“They did an end run around the process. It was a disservice to the democratic process. Clout, money and influence determined the outcome,” said Collins, who was one of 13 senators voting against the bill Thursday.

Gelder and other Quinn health care officials briefed advocates and vigorously defended the compromise measures during a contentious, 45-minute conference call last week.

“We did the best we could … to preserve the most significant components of the nursing home reform work,” Gelder said during that call.

Pressed by Collins and advocates for the disabled about being excluded, Gelder said: “You’re right, this was a move around the process that was noted by everyone. This is still a game of people’s power relative to other people’s power.”

But in an interview Friday, Gelder said “nothing from the 2010 reforms was lost” in the final agreement.

The compromises and painful cuts, which were applied to a variety of health care programs, were needed to keep Medicaid from collapsing, state officials said.

Officials argued that the new agreements will still move the state toward nursing home reform by instituting some staffing requirements and by using financial incentives to divert fewer disabled people from nursing facilities into community settings.

Under the new staffing requirements, a minimum of 25 percent of all bedside care must be provided by licensed nurses, with 10 percent done by registered nurses, who have a higher level of credentials and are paid more. Advocates for the elderly and disabled had been in months-long negotiations to craft a rule mandating that 20 percent of all care be provided by registered nurses. The staffing requirement will be revisited within 18 months.

Pat Comstock, executive director of the Health Care Council of Illinois, the state’s largest industry association, said the governor’s office invited her group to negotiate the rate cut and staffing levels “simply because we represent 75 percent of the Medicaid providers in the nursing home community.”

Comstock added that her group helped embraced the 2010 reform legislation and said the new Medicaid cuts would not imperil progress. Amid the state’s budget crisis, nursing homes “took a cut like all other (Medicaid) providers. Nobody was going to be spared in this process, and we certainly weren’t,” Comstock said.

Even before the Medicaid cuts passed, the 2010 overhaul effort was proceeding in fits and starts, with many of the most important measures not yet enacted amid grinding rules-committee negotiations among lawmakers, the nursing home industry and advocates for the elderly and disabled.

Illinois is unusual in its reliance on nursing homes to treat younger adults with mental illness, including thousands with felony records. In response to a Tribune investigation that documented rapes and assaults in a subset of understaffed facilities, Quinn and state lawmakers enacted a sweeping law that required facilities to hire more staff, separate the most dangerous residents and move thousands of residents with mental illness into smaller, community-based settings.

The reform act also gave state regulators increased powers to fine and even shutter the worst homes. But state officials say the nursing home industry has challenged some of the reforms, while others are jeopardized by the need to slash the state’s $14.3 billion budget for Medicaid, which funds care in many of the facilities.

The cuts also end the Illinois Cares Rx discount drug coverage for 180,000 low-income people and tighten Medicaid screening in ways that could remove hundreds of thousands of people from coverage. Nursing homes and hospitals stand to see payments reduced to save the state about $240 million.

“Across the board, seniors are going to be harshly affected by the Medicaid cuts,” said David Vinkler, associate state director of AARP. The cuts to services ranging from wheelchair repairs to physical therapists are “going to drive more seniors into nursing homes and undercut improvements we planned on seeing in nursing homes across the state,” Vinkler said.

But state Sen. Heather Steans, D-Chicago, who spearheaded the 2010 reform bill, defended the new legislation, saying it included “a lot of very positive movement.”

“The nursing home lobby does have an extraordinary amount of influence here,” she said. “That’s why I was pleased to make as much progress as we did because it is very difficult.”

Under the new law hammered out Thursday, Illinois will move to a Medicaid reimbursement system that pays the facilities more for serving nursing home patients with acute medical needs. The new method — known as the “resource utilization group” — creates a disincentive for housing less-acute patients in institutions, Quinn administration officials said.

In addition, the rate cut is fashioned in a way that further encourages nursing homes to house only seriously ill patients, not those who can be better served in smaller settings, Steans said.

“There’s just a 1 percent cut to the … reimbursement for high-needs patients, but for low-level-needs patients, there’s a 10 percent rate cut,” Steans explained. That’s “a huge step forward.”

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