May 09, 2014
Contact: Alison Everett, 717-221-7935
Cell: 717-599-2077

Rally for Frail Elderly, Disabled in Skilled Nursing Facilities

Urge increased Medicaid funding for state’s skilled nursing centers

HARRISBURG — More than 600 skilled nursing center administrators and caregivers from across
Pennsylvania, many of them carrying photographs of elderly residents or loved ones, rallied at the state
Capitol today to ask legislators to make the care of the commonwealth’s frailest and sickest individuals a
priority in the state budget.

With two new independent studies warning that Pennsylvania’s skilled nursing centers are on a financially
unsustainable path, participants urged lawmakers to preserve the small budget increase that Gov. Tom
Corbett proposed for nursing homes as well as to again fund a program that preserves access to care by
providing an incentive payment to centers that care for a higher-than-average percentage of Medicaid

“In five short years, Pennsylvania’s skilled nursing centers have gone from being the bedrock of our state’s
long-term care network to a profession on life support,” said Stuart Shapiro, M.D., President and CEO of the
Pennsylvania Health Care Association and Center for Assisted Living Management (PHCA/CALM).
“Without increased funding for the care of our frail elderly, many of our nursing centers will not survive, and
that will have enormous consequences on residents, their care and our communities. It’s a grim scenario.”

According to a recent study by Avalere Health, a respected Washington, D.C., research company that
focuses on health care, Pennsylvania’s skilled nursing centers have seen their operating margins drop by
more than 60 percent between 2007 and 2012, from 3.2 percent to 1.2 percent. For facilities with 75 percent
or higher Medicaid residents, those margins dip 80 percent over the same time frame, to just 0.3 percent.

Pennsylvania now 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.

The commonwealth reimburses nursing centers an average of $26 a day less per resident than the true cost of
care. That shortfall has more than 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 $9,500 per resident every year on two-thirds of the individuals in their care.

Unreimbursed Medicaid costs to these facilities will exceed $470 million this fiscal year.

Skilled nursing facilities cannot invest in necessary capital improvements or advanced technology that would enhance care, nor can they pay competitive wages that would increase staff retention, which is so vital to high-quality care. Some facilities have had to turn away seniors on Medicaid because they cannot afford their care, creating access to care issues in parts of the state.

“The patients of today’s nursing centers often require intense care and have medical needs such as dialysis, chemotherapy, serious wounds, IV therapy, tracheotomies, ventilators, high-flow oxygen, traction and much more,” said Colleen Engler, director of recruitment and professional development with Guardian Elder Care, a Pennsylvania company that operates 22 skilled nursing facilities.

“This not only requires our employees to maintain a very high level of professional competency, but our actual facilities must be fitted to meet the greater needs of our residents — and all of this costs money,” Engler said.

As some facilities turn away seniors on Medicaid because of unmanageable costs, access to care is a growing issue in parts of the state.

So is maintaining the major milestones that nursing centers have achieved over the last year in several quality measures. The state’s skilled nursing facilities already have a lower average number of deficiencies than centers nationwide, and rank second best for their very low number of serious deficiencies. But all these gains are at risk.

Skilled nursing facilities care for the state’s sickest and frailest residents, such as those with advanced dementia or severe chronic health conditions that require around-the-clock care. Over the years, the acuity (sickness) level of residents has increased, as has the cost of care. But funding hasn’t kept pace.

Although all health-care providers lose money on Medicaid patients, none lose as much as skilled nursing facilities, whose Medicaid percentage is the largest among providers.

At the rally, participants praised Gov. Corbett, who made the elderly and disabled a priority in his budget by calling for increased funding for care across all settings — at home, in the community, and in a skilled nursing facility. They urged lawmakers to preserve that increase as they work to craft a final 2014-15 spending plan.

Advocates also called on the General Assembly to once again fund a program that they 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.

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