Rep. Pitts’ Bill Cuts Nursing Home Funding by $85.6 Million

HARRISBURG — Legislation introduced by U.S. Rep. Joseph Pitts and fast-tracked for a vote as early as later today would cut funding to Pennsylvania nursing homes by $85.6 million in the first year and by $1.03 billion over the next decade, according to an analysis by the Pennsylvania Health Care Association (PHCA).

The Pitts bill, which only recently was unveiled and has yet to have a public hearing, would reduce the allowable provider assessment on nursing homes from 6 percent to 5.5 percent, costing Pennsylvania millions of dollars in federal matching funds each year and limiting the state’s ability to finance an already underfunded Medicaid program.

“Most of Pennsylvania’s nursing homes, especially those caring for a high percentage of Medicaid patients, already operate on razor-thin margins because of chronic government underfunding,” PHCA President and Chief Executive Officer Russ McDaid said. “The Pitts measure would pull the rug from under them and put at risk access to high-quality long-term care for the commonwealth’s most vulnerable residents.”

Pennsylvania is one of 43 states, along with the District of Columbia, that imposes a provider assessment, also known as a quality fee or tax. The Centers for Medicare and Medicaid Services (CMS) approved the state’s use of the assessment in 2003.

The state uses the provider assessment program to stabilize Medicaid rates to nursing homes and more adequately fund quality, long-term care services for seniors and individuals with disabilities.

Under the program, the state Department of Human Services (DHS) sets assessment rates that it collects from qualified licensed nursing homes. DHS then uses that revenue to generate federal matching funds that, combined, provide additional reimbursements to skilled nursing facilities, especially those with high Medicaid rates, and help to expand coverage to more frail elderly residents.

Most importantly, the provider assessments help to stabilize Medicaid rates to nursing homes. That’s critical in Pennsylvania, where the state reimburses nursing homes an average of $25.43 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. That means nursing homes on average lose about $9,300 annually for every Medicaid resident in their care.

“The reductions that Congressman Pitts is proposing to Pennsylvania’s provider assessment program would result in a larger shortfall and even greater financial strain on already struggling nursing homes,” McDaid said.

While federal budget challenges must be tackled in a careful, deliberate manner, McDaid said major legislative proposals like Pitts’ bill — which would undercut hard-won improvements in quality, long-term care and undermine the tools states rely on to bring economic stability — should be subject to a full public review before Congress votes.

McDaid also urged Gov. Tom Wolf’s administration and state legislative leaders to intervene in the matter, as they do with many federal issues, and make known to the congressman the serious fiscal impact it will have on Pennsylvania’s budget and the long-term care services that seniors rely on for their daily living needs.