Critical funding from Pennsylvania’s state budget helps sustain long-term care

Harrisburg, PA. (June 30, 2021) –– After nearly 16 months of unsustainable costs due to the COVID-19 pandemic, long-term care providers will receive critical funding relief from Pennsylvania’s 2021-22 state budget. This lifeline comes at a time when providers fear they could be forced to shutter their doors within the next six months.

The state budget, which was signed by Governor Tom Wolf on Wednesday, allocates a total of $315 million to nursing homes, assisted living communities and personal care homes. Lawmakers allocated $282 million of that total to long-term care from the American Rescue Plan federal stimulus package, including:

• $247 million to nursing homes;
• $30 million to assisted living communities and personal care homes; 
• $5 million for a newly-created HVAC grant program for long-term care facilities

Additionally, the legislature continued to fund a $16 million Medicaid Day One Incentive (MDOI) payment for high-Medicaid nursing homes, which receives a federal match of approximately $17 million.

“Members of Pennsylvania’s General Assembly and Governor Tom Wolf affirmed their commitment to long-term care providers, workers, residents and families by answering their call for critical support,” said Zach Shamberg, president and CEO of the Pennsylvania Health Care Association. “In approving this year’s state budget, our leaders have chosen to make a historic investment in the commonwealth’s nursing homes, personal care homes and assisted living communities, prioritizing federal stimulus dollars from the American Rescue Plan for an industry that truly needs to be rescued.”

In a recent survey commissioned by the American Health Care Association and the National Center for Assisted Living (AHCA/NCAL), participating Pennsylvania providers listed additional pay for staff, the hiring of costly agency staffing, PPE and COVID-19 testing as primary cost drivers throughout the past five months. Of the 17 Pennsylvania survey respondents, 75 percent say they are operating at a loss and 25 percent say they won’t be able to operate longer than six more months without financial support.

“PHCA and our members are grateful to our elected leaders for their support throughout the COVID-19 pandemic, and for standing with Pennsylvania’s vulnerable population and their providers of care,” said Shamberg. “We have been fighting to care for our most vulnerable and, now, that fight has culminated in a significant step toward sustaining Pennsylvania’s long-term care continuum. But the fight is far from over.”

Adding to the financial crisis, COVID-19 has depleted the long-term care workforce, causing significant staffing shortages. The AHCA/NCAL survey revealed that 94% of the Pennsylvania respondents had a shortage of workers on more than one occasion in the previous month, which resulted in the hiring of agency staff or requesting workers to pick up extra shifts and overtime.

Prior to the pandemic, Pennsylvania’s Department of Labor & Industry identified a projected shortage of more than 22,000 direct care workers a year, between now and 2026.

During the height of the pandemic in 2020, Pennsylvania long-term care providers were collectively spending more than $96 million a week for PPE. One-time testing for every long-term care resident and worker in Pennsylvania costs approximately $30 million each week.