June 22, 2018
Contact: Eric Kiehl, APR, 717-221-7935
Cell: 717-599-2077

PHCA Notes that the First Funding Increase in Four Years is an Important First Step to Funding Senior Care

Spending plan includes 1.0% rate increase plus continuation of add-on program designed to help struggling facilities with high Medicaid populations

HARRISBURG — Medicaid funding for Pennsylvania’s skilled nursing facilities has been held flat since the fiscal year 2014-2015, including the last three consecutive state spending plans, and for five of the last seven budget cycles in total. In the same timeframe, costs have gone up year after year, and seniors living in nursing facilities and their caregivers have paid the price for level funding. The final 2018-19 fiscal year budget breaks that streak with a one percent rate increase and continuation of a program that helps centers with exceptionally high Medicaid populations. However, the one percent rate increase does not go into effect until January 1, 2019, and is not included in the Per Member Per Month (PMPM) capitation payment provided to the Community HealthChoices MCOs.

“We are extremely disappointed with this minuscule increase for skilled nursing facilities that for years have been attempting to do more and more with less and less, with mixed results,” said W. Russell McDaid, President and CEO of PHCA. “We spent a great deal of time informing the leadership and members of the General Assembly about the very real challenges these centers face. We had hoped to see a much larger increase, and there is more work to be done to provide our seniors living in nursing facilities with the support they need and have earned in the state budget.” He added, “We have more work to do to bring funding to where it needs to be for our aging population.” In addition to the one percent increase, the final spending plan also continued the $8 million for the Medicaid Access Program that legislators created five years ago to help facilities with high Medicaid populations. That will bring approximately $9 million in federal funds.

The cost of care is rising, as are the costs for everything from labor to drugs and medical supplies to food and utilities. Older residents today suffer from more complex medical conditions and debilitating afflictions, such as dementia or Alzheimer’s disease. That means the level of care residents require is more advanced, more expensive and more dependent on skilled caregivers to provide the intensive, around-the-clock, restorative care that people need.

In addition to the 1 percent increase, the final spending plan also continued the $8 million for the Medicaid Access Program that legislators created five years ago to help facilities with high Medicaid populations. That will bring approximately $9 million in federal funds.

More than two-thirds of all residents in skilled nursing facilities depend on Medicaid for their daily living needs. As a result, Medicaid funding in the annual state budget is about more than policy direction and priorities, it has a direct impact on the lives of the almost 52,000 Pennsylvanians who rely on the state Medicaid program to fund their round the clock care needs in a nursing facility daily.

While the FY 18-19 increase is an important investment in Pennsylvania’s seniors, Medicaid remains significantly underfunded in Pennsylvania. Based on current Medicaid reimbursement levels, skilled nursing facilities are paid $47.36 per day less than Pennsylvania’s payment regulations would require if their rates were fully funded — a gap of $17,200 annually for every Medicaid resident in their care.

“Yes, I’m disappointed that this increase doesn’t keep pace with the rising costs facing Pennsylvania’s nursing facilities. They provide round the clock care for frail seniors on Medicaid whose only misstep was outliving their savings,” McDaid said. “We again saw increases for education, economic development and infrastructure in the three to ten percent range. Frail seniors in need of round the clock care in a nursing facility need and deserve the same increases in the state budget as we invest in the education of our children. And, we will continue to make that case in the strongest terms possible moving forward.

“This budget does not even begin to close the Medicaid gap fully,” said McDaid “It is barely a first step to restore funding to levels where Pennsylvania’s nursing facility operators can stay in business and make investments in care. Many are on the brink of financial collapse, and the one percent increase will put the day of reckoning off for some, but only slightly. Their ultimate goal is to enhance care for vulnerable seniors and retain the dedicated caregivers they employ.”

PHCA will continue to work with the administration and legislators to secure their commitment to this vulnerable population and those providing their care by providing the Medicaid funding necessary for the provision of quality post-acute care in nursing facilities.

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