|FOR IMMEDIATE RELEASE|
April 3, 2012
|Contact: Leigh Ann Bradley|
New Avalere Health Analysis Details State Impact of “Bad Debt” SNF Medicare Funding Cuts
FL, OH, IL, PA, NC, LA, IN, TN, GA, NJ Skilled Nursing Facilities Take Biggest Medicare Funding Hit Resulting From Passage of Middle Class Tax Relief and Job Creation Act of 2012
Washington, DC – A new Avalere Health analysis detailing the negative impact on Skilled Nursing Facilities (SNFs) resulting from so called “bad debt” provisions passed in the Middle Class Tax Relief and Job Creation Act of 2012 finds facilities in Florida, Ohio, Illinois, Pennsylvania, North Carolina, Louisiana, Indiana, Tennessee, Georgia and New Jersey will absorb the largest Medicare funding cuts. Nationally, the provision will cut SNF payments by at least $3 billion over the FY 2012-21 budget window.
Alan G. Rosenbloom, President of the Alliance for Quality Nursing Home Care (AQNHC), pointed out that the phrase “bad debt” is a complete misnomer. The federal government itself, he said, prevents SNFs from collecting as much as 90 percent of SNF bad debt. “SNFs have no legal recourse to collect ‘bad debt’ from state Medicaid agencies -- and is more accurately described as ‘uncollectible debt’ as mandated by federal law,” he stated. He said the U.S. SNF sector, America’s second largest health facility employer, faces yet another $8-9 billion in cuts between FY 2012-21, resulting just from the looming sequestration threat.
The following is the Top Ten State Impact on Medicare Payments to SNFs resulting from the “Bad Debt” Provision in the Middle Class Tax Relief and Job Creation Act (amounts in millions; methodology notes available at www.aqnhc.org; *Discrepancy due to rounding):
|State||FY 2015 Medicare Bad Debt Payments: Prior Law||FY 2015 Medicare Bad Debt Payments: Current Law||Impact of Bad Debt Cut in the Middle Class Tax Relief and Job Creation Act of 2012|
The Alliance leader pointed out the SNF sector is already slated to absorb another $48 billion in Medicare reductions between FY 2012-21, and that SNFs also remain disproportionately reliant on Medicaid as compared to other providers -- with Medicaid paying for 57 percent of patient days. The new Alliance Spring 2012 Care Context policy paper details the fact that within the past 12 months, 32 states have cut or frozen Medicaid funding for SNFs. Two highly problematic examples include Florida, which has cut Medicaid SNF funding by 5.8 percent, and, Ohio, which has cut Medicaid SNF funding by 6 percent.
According to the new Avalere “bad debt” analysis, Florida SNF’s Medicare funding will be cut $60.5 million (#1 nationally) and Ohio SNFs will be cut $30.5 million (#2 nationally). “While SNFs, their patients and their workforce have absorbed a battery of funding cuts, Florida and Ohio facilities, especially, have taken a pounding in terms of cumulative state and federal funding cuts,” Rosenbloom observed.
Moving forward on the policy front, Rosenbloom pointed out that SNFs play a key role in the post-acute care continuum, and are poised to play a still greater role if Congress acts to rationalize the nation’s Medicare post-acute payment system. In a recent Inside Health Policy news article, Rosenbloom and Avalere CEO Dan Mendelson detail the need for coordinated governmental SNF funding policy to help achieve greater efficiency in Medicare spending and improve quality.