Contacts:
Debra DeShong Reed, 202-528-4214
Amy Weiss, 202-203-0448

MedPAC Once Again Fails to Evaluate Overall Economic Conditions in Assessing SNF Funding Requirements; Supports Revamping Post-Acute Quality Measures

$4.4 Billion Annual Medicaid Underfunding Cannot be Ignored as Key Factor in Determining Policy

Washington, DC – Commenting on the Medicare Payment Advisory Commission’s (MedPAC) formal recommendation that skilled nursing facilities (SNFs) should receive no regular market basket update for 2009, the Alliance for Quality Nursing Home Care said MedPAC’s overall evaluation “is flawed and not reflective of the true economic conditions nursing homes face in today’s marketplace.”

 “When assessing the adequacy of Medicare funding for the nation’s nursing home residents, and making subsequent recommendations to Congress, MedPAC should be obligated as a matter of basic responsibility to consider the overall economic conditions in which the sector operates,” stated Alan G. Rosenbloom, President of the Alliance. “By ignoring the substantial losses nursing homes face due to inadequate Medicaid payments - - a gap likely to grow as states facing tough economic times cut Medicaid payments to providers even more - - MedPAC’s recommendation threatens the quality of care America’s nursing home patients deserve and the wages, benefits and in some cases very jobs of the hundreds of thousands of direct care workers employed in the nation’s nursing homes.”

Rosenbloom noted that MedPAC’s guidance expressly does not consider Medicaid inadequacies, despite the fact that Medicaid pays for nearly two thirds of nursing home patients and consistently pays less than the cost of care.  “Medicare makes up for that shortfall – and without adequate Medicare funding, patient care and quality improvements will be at risk,” he continued.   

MedPAC, in making its draft recommendation in December, 2007, acknowledged the shortfall in Medicaid funding and the fact that overall operating margins for nursing homes are low.  Nonetheless, MedPAC continues to base its recommendations exclusively on Medicare performance. According to a study by BDO/Seidman recently released by the American Health Care Association, the Medicaid program pays some $4.4 billion less than the actual cost of nursing home care for the nation’s seniors. This translates into $13.15 per patient per day less than the cost of care, an amount which has increased 45% since 1999. 

“When formulating its recommendations to Congress, MedPAC should be obligated to evaluate the real and growing interdependence between Medicare and Medicaid,” Rosenbloom continued. “Substantial Medicaid losses offset Medicare gains, and the result is that overall operating margins for America’s nursing homes hover close to 3% -- far less than those of any other group of health care providers.”

Rosenbloom did, however, offer support for the concepts behind several other recommendations MedPAC has made concerning measures used to evaluate the quality of care for post-acute Medicare patients.  “We concur with MedPAC’s conclusions that current post-acute quality measurements are inadequate and require meaningful restructuring to better assess the care and services provided to a growing short-term, medically complex patient population in nursing homes.”  Rosenbloom noted that these recommendations essentially acknowledge the growing importance of skilled nursing facilities to the cost-effective provision of post-acute services to Medicare patients, and concluded that “while we fundamentally disagree with MedPAC’s approach to payment recommendations, we believe that revamping post-acute quality measures is an important step for the future.” 

####

The American Health Care Association (AHCA) and National Center for Assisted Living (NCAL) represents nearly 11,000 non-profit and proprietary facilities dedicated to continuous improvement in the delivery of professional and compassionate care provided daily by millions of caring employees to 1.5 million of our nation’s frail, elderly and disabled citizens who live in nursing facilities, assisted living residences, subacute centers and homes for persons with mental retardation and developmental disabilities.  For more information, please visit www.ahca.org.

The Alliance for Quality Nursing Home Care (“The Alliance”) is a coalition of 16 national long term care provider organizations that care for approximately 300,000 elderly and disabled patients each year in nearly 1,800 facilities across America. The Alliance is dedicated to improving the quality of nursing home care in the United States through measured results and outcomes and to assuring the government resources necessary to provide high quality care and services.