May 15, 2015
Contact: Eric Kiehl, 717-221-7935
Cell: 717-599-2077

PHCA/CALM CEO Urges Increase in State Medicaid Funding

Call to action follows recent rally where 500 caregivers urged support frail elderly. Urged legislation to protect skilled nursing facilities against predatory out-of-state attorneys

HARRISBURG — Pennsylvania’s skilled nursing centers are on a financially unsustainable path, said Stuart H. Shapiro, M.D., CEO of the Pennsylvania Health Care Association and Center for Assisted Living Management (PHCA/CALM). He is urging Gov. Tom Wolf and lawmakers to provide a small budget increase for nursing homes and once again fund a program that preserves access to care for the state’s poorest frail elderly and disabled residents on Medicaid.

“Skilled nursing facilities care for the sickest and frailest elderly and disabled individuals who need around-the-clock care,” Shapiro said during the taping of a statewide public affairs TV program, which is set to begin airing this weekend. “Over the years, the acuity (sickness) level of these residents has increased. As the level of required care has risen, so has the cost to provide this care. Unfortunately, funding has not kept pace with costs, especially for those supported by Medicaid, putting nursing homes on a financially unsustainable path.”

Shapiro’s appearance on the TV show coincides with National Nursing Home Week and follows a Capitol event where more than 500 skilled nursing center administrators and caregivers — many of them carrying posters with photographs of elderly residents or loved ones — rallied to ensure care of the state’s frailest and sickest individuals remains a priority in the state budget.

Pennsylvania ranks among the worst in the country with respect to Medicaid reimbursements, according to a study by Eljay LLC, a nationally recognized leader in long-term care consulting. Two-thirds of all nursing home residents in the state rely on Medicaid.

The commonwealth reimburses nursing centers an average of $23 a day less per resident than the true cost of care. That shortfall has almost doubled since 2007, when it totaled $13.23 per resident per day. With 65 percent of all nursing center residents relying on Medicaid to pay for their care, nursing centers now lose an average of $8,500 per resident every year on two-thirds of the individuals in their care. Pennsylvania’s Medicaid program doesn’t come close to covering the real cost of care.

PHCA/CALM is seeking an increase of 2.4 percent in Medicaid payments to nursing homes to cover the ever increasing cost of care. The 2.4 percent is the three year average increase in the nursing homes market basket used by the Centers for Medicare and Medicaid Services (CMS) to set Medicare rates. The market basket represents how much more it would cost a nursing home each year to purchase the same mix of goods and services. This increase equates to $36 million in state funds, which will bring in an additional $40 million in federal funds.

Shapiro also called on the legislature once again to fund a program that it created last year to aid nursing homes that care for a higher-than-average percentage of residents on Medicaid. That “add on” program would cost the state $16 million, while bringing in an additional $17 million in federal funds, to ensure seniors on Medicaid have access to long-term care in the communities where they live.

During the second half of the program, Dr. Shapiro stressed the need for relief for Pennsylvania’s skilled nursing facilities from the mounting pressure of frivolous lawsuits filed by mostly out-of-state predatory lawyers. Skilled nursing facilities should have the same protections granted to physicians in cases involving punitive damages and are seeking legislative remedies to protect them against these frivolous lawsuits. While punitive damages awards are infrequent, they can be astronomical. Without protections, providers, their insurers are more likely to settle a weak case than risk a runaway jury that could bankrupt their business.

According to a new national actuarial analysis on liability costs, published by AON, the liability cost per bed per day was $4.71 in Pennsylvania in 2013. Given that there are about 19.2 million days of care paid for by the commonwealth’s Medicaid program, almost $91 million was spent on liability related costs in Pennsylvania nursing homes in 2013. These $91 million should be spent on patient care and to line the pockets of out of state lawyers who often take 40—50% of settlements.

Despite these funding pressures and the current legal environment, these lawsuits contradict trends in quality as Pennsylvania’s nursing centers continue to exceed major milestones in quality. According to the U.S. Centers for Medicare & Medicaid Services’ five-star system, which is used to rank the country’s best nursing homes, Pennsylvania facilities have improved on 10 of 11 five-star quality measures from the third quarter of 2013 to the third quarter of 2014.

“The high legal costs paid by Pennsylvania health care providers, employers and governments inhibit job growth, increase health care costs and limit access to medical care,” Shapiro said. “Punitive damage reform is crucial for Pennsylvania’s long-term care providers in order to continue to provide quality care to our most vulnerable citizens.”

“Pennsylvania Newsmakers” is one of the state’s premier politics and public policy television talk shows. The show is available at www.phca.org and will air regionally:

  • WGAL Channel 8 (Harrisburg and Lancaster) Sunday, May 17 at 7:30 a.m.
  • Pennsylvania Cable Network, Sunday, May 17 at 4:30 PM
  • WBPH (Lehigh Valley and Philadelphia) Monday, May 18 at 8:30 p.m.
  • WKBS 47 (Altoona) Saturday, May 23 at 9:30 a.m.
  • WPCB 40 (Pittsburgh) Saturday, May 23 at 9:30 a.m.
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