National Long Term Care Leaders Warn Illogical CMS Regulatory Action a
Serious Public Policy Misstep; Seniors' Nursing Home Benefits Take Biggest
Hit in CA, FL, NY, TX, OH, IL, PA, NJ, MI, MA
WASHINGTON, May 13 /PRNewswire-USNewswire/ -- In releasing a new Lewin
Group analysis of the Bush Administration's $770 million cut to
Medicare-financed nursing home care, national and state long term care
leaders warned the regulatory-driven cuts not only jeopardize seniors'
access to quality nursing home care -- particularly in rural areas -- but
also present a clear and present danger to the U.S. economy and the state
and local caregiver jobs base.
During a media teleconference to release the Lewin economic impact data
as well as new state-by-state impact analysis from the American Health Care
Association (AHCA), Al Dobson, a Lewin Group consultant, said the so-called
"Forecast Error" rule proposed on May 1, 2008 by the Centers for Medicare
and Medicaid Services (CMS) represents a net negative total economic impact
of $4.5 billion for FY 2009. In addition, the data finds, the $770 million
decline in revenue will impact approximately $1.8 billion in wages, 43,530
jobs and approximately $661 million in federal, state and local tax revenue
in the first year.
"In rural communities, where nursing homes are among the largest
employers, the negative economic effects would be particularly damaging,"
Dobson observed. "Policymakers must understand and reconcile the dual
dimensions of these Medicare cuts in that they not only directly impact
seniors' access to quality nursing home care, but also have a negative
ripple effect throughout our national, state and local economies."
First Year Economic Impact of $770 million Medicare Nursing Home
Payment Cutback on the U.S. Economy:
Direct Indirect Induced Total
Business
Activity
Impact ($) $770,000,000 $458,953,536 $3,295,406,468 $4,524,360,004
Income
Impacts ($) $480,247,872 $141,926,326 $1,156,905,124 $1,779,079,322
Employment
Impacts (jobs) 15,607 3,469 24,454 43,530
State & Local
Tax Revenue ($) $230,915,715
Federal Tax
Revenue ($) $430,426,858
Source: The Lewin Group analyses of the IMPLAN model.
Direct effect represents the impact (e.g. change in employment or
revenues) for the expenditures and/or production values specified as
direct final demand changes.
Indirect effect represents the impact (e.g. change in employment) caused
by the iteration of industries purchasing from industries resulting from
direct final demand changes.
Induced effect represents the impacts on all local industries caused by
the expenditures of new household income generated by the direct and
indirect effects of direct final demand changes.
Total effect is the sum of the direct, indirect and induced effects.
(1) 42 CFR Part 413, Department of Health and Human Services, Centers
for Medicare and Medicaid Services, Medicare Program; Prospective Payment
System and Consolidated Billing for Skilled Nursing Facilities for FY 2009,
p. 29-31.
A complete copy of the Lewin Group analysis can be found at
http://www.ahca.org and http://www.aqnhc.org.
Bruce Yarwood, President and CEO of AHCA, also said a separate analysis
of the $770 million CMS Medicare cuts finds the regulatory changes will
incur an $11.12 per patient day (PPD) cut in Medicare-financed nursing home
care nationally, and will have the most significant negative impact on
seniors in California, Florida, New York, Texas, Ohio, Illinois,
Pennsylvania, New Jersey, Michigan and Massachusetts. The analysis,
computed by the AHCA Reimbursement and Research Department using Office of
Management and Budget (OMB) data from the Bush Administration's FY 2009
Budget and the Centers for Medicare & Medicaid Services (CMS), finds the
following:
Rank State Total Reduction (Millions) Per Patient Day
#1 California $64.9 $13.69
#2 Florida $62.3 $11.66
#3 New York $50.0 $11.12
#4 Texas $47.0 $10.34
#5 Ohio $44.8 $10.92
#6 Illinois $42.2 $11.09
#7 Pennsylvania $36.2 $10.66
#8 New Jersey $34.6 $13.09
#9 Michigan $28.7 $11.20
#10 Massachusetts $27.1 $12.01
U.S. Total $770 $11.12
"In addition to the negative impact the CMS policy will have on our
economy and employment base, the regulatory changes will severely undermine
the growing complex health care needs of America's oldest, sickest
seniors," Yarwood continued. "The more lawmakers on both sides of the aisle
learn about the nature and negative impact of the Bush Administration's
regulatory changes, especially as they relate to how it impacts their
states' seniors, the more we predict they will seek to halt them."
Alan Rosenbloom, President of the Alliance for Quality Nursing Home
Care, said the CMS rule "will unquestionably undermine our profession's
long-standing goals of increased efficiency and effectiveness -- which
benefits nursing home patients, our caregiver workforce, and taxpayers
alike." In moving forward with these regulatory cuts, he continued, "CMS
fails to factor-in important changes in Administration-initiated Medicare
policies that, as intended, are successfully and intelligently moving large
numbers of high acuity patients into skilled nursing facilities. These
patients would otherwise have been cared for in a higher-cost setting --
which is completely at odds with the Medicare modernization efforts America
needs and that seniors deserve." Rosenbloom said the policies now in effect
saved Medicare $709 million in 2006 alone, according to a
previously-released study by Avalere Health, LLC.
Yarwood and Rosenbloom argued that as the nature of the nursing home
patient population continues to change and evolve, it should be the policy
of the federal government to help facilitate the ability of nursing homes
to accommodate the care needs of higher-acuity, post-acute Medicare
beneficiaries.
Tony Marshall, Senior VP & COO of the Florida Health Care Association
(FHCA) in Tallahassee, FL, said the CMS action to cut Medicare-financed
nursing home care will be especially damaging to seniors in states like
Florida, who, he says, have just endured substantial Medicaid funding cuts
as a result of recent state legislative actions. "As a result of the CMS
policy change, Florida seniors are facing the second highest Medicare
funding reduction in the nation -- on top of the state Medicaid cuts passed
into state law in recent weeks," Marshall said. "Medicare and Medicaid
funding are inextricably linked. The combination of cuts to both programs
squeezes facilities in a manner harmful to older residents' rising care
needs, as well as to our local economy and caregiver jobs base."
Yarwood and Rosenbloom also noted that a diverse group of lawmakers --
Senators Pat Roberts (R-KS), Ron Wyden (D-OR) and Debbie Stabenow (D-MI) --
are leading the effort on Capitol Hill to reverse the proposed CMS policy.
The text of the separate Roberts, Wyden and Stabenow letters are available
at http://www.ahca.org.
SOURCE The Alliance for Quality Nursing Home Care; American
Health Care
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Related links:
http://www.ahca.org
http://www.aqnhc.org
CONTACT:
Amy Weiss of the Alliance for Quality Nursing
Home Care, +1-202-203-0448; or Rebecca Reid of the American
Health Care Association, +1-410-267-1128
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