Pennsylvania Governor Wolf is paying $91 million to nursing homes to offset the costs of proposed new employment regulations, but the industry says it’s not enough

The governor and Republican lawmakers have signaled their interest in providing more help to the nursing home industry, which is struggling with low wages, staff shortages and high demand.

  • Written by Jackson White for Spotlight PA

Heather Khalife/Philadelphia Inquirer

Nearly 11,000 long-term care residents in Pennsylvania have died since the start of the COVID-19 pandemic, a toll that has brought renewed attention to problems in the nursing home industry.

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Governor Tom Wolf is asking the Pennsylvania legislature to spend millions to raise the main reimbursement rate for skilled nursing homes in the state to help offset costs for proposed new regulations that would increase required day care.

With the state’s June 30 budget deadline fast approaching, the Democrat wants to commit $91.25 million to increase the amount of money nursing homes receive for Medicaid residents.

Nearly 11,000 long-term care residents in Pennsylvania have died since the start of the COVID-19 pandemic, a toll that has brought renewed attention to long-term issues such as Seriously low staffing requirements and outdated regulations.

Groups, including the Pennsylvania Health Care Association, which lobbies on behalf of the state’s long-term care providers, say the state’s low Medicaid reimbursement rate is a major obstacle to providing higher levels of care. They say the current rate could leave nursing homes without funding to raise staff wages or purchase patient care supplies.

The association estimates that Wolf’s investment would raise Medicaid’s daily reimbursement rate to about $210 per resident on average from the current average rate of $199.96. Neighboring states such as Ohio, Maryland, and New Jersey, have higher rates.

But while the PHCA sees Wolf’s proposal as a welcome first step, the organization argues that it is not enough. The trade group estimates that organizational changes will require hiring 10,000 additional workers and spending an additional $434 million annually. This has led some to dismiss the plan as an unfunded mandate.

According to the Pennsylvania Department of Health, there are 683 nursing homes The state serves about 80,000 residents. This number is expected to rise in the coming years as the state’s population over the age of 65 grows. According to PHCA, about 66% of residents who live in nursing homes across the state are paid for by Medicaid for their accommodation. Medicare 13% extra.

There appears to be agreement among lawmakers that more investment is needed, but how to do this is still being discussed. If funding for nursing homes remains the same, advocacy networks, experts and nurses on the ground fear that facilities are ill-equipped to support the elderly.

“We’ve come to a place where we either need to invest in long-term care in this year’s state budget, or the entire system could collapse,” said Zach Shamberg, president and CEO of the Pennsylvania Healthcare Association. “That would be disastrous for our older residents.”

Why is repayment important?

With the way Medicaid and Medicare funds are distributed, many nursing home facilities seek to receive Medicare-funded patients rather than Medicaid-funded patients.

“In this country we have decided not to cover long-term home care for the elderly within Medicare,” said David Grabowsky, professor of health care policy at Harvard Medical School. “So it’s really the only major service that’s been pushed into Medicaid today.”

Medicare is a federal insurance program that typically covers short-stay patients, such as patients undergoing physical therapy or postoperative care.

Medicaid is a state-run assistance program that – following federal government guidelines – supports low-income people and typically covers long-term inpatients. The reimbursement rate is what the state government pays to each nursing home on behalf of an eligible patient.

According to Grabowski, Pennsylvania’s low Medicaid reimbursement encourages nursing homes to seek Medicare patients who plan for short stays rather than accept Medicaid patients who will require extended stays.

This dynamic makes the federal government a “very generous payer,” he said, and these windfall gains allow care facilities to achieve double-digit margins for short-term inpatients. Meanwhile, Medicaid patients usually result in negative margins for facilities, he said, causing a gap between the cost of care for residents and the amount of government funding.

According to a February study of LeadingAge PAa trade association representing about 380 providers in the state serving seniors, the daily gap between what nursing homes received for Medicaid residents versus what they spent was $86.26 per resident, on average.

Grabowski said increasing the Medicaid reimbursement rate could ease some of the problems. Lobbyists and industry advocates in Pennsylvania are Requesting an investment of $294 millionInstead of the $91.25 million suggested by Wolff.

Grabowski argues that any investment in the industry must also include some form of accountability to ensure that the money improves quality and is not misused.

“I think we will have to rethink what it means to live and work in a nursing home,” Grabowski said. “Because the current economic model is definitely broken.”

More money, more control

Wolff’s $91.25 million bid comes with proposed regulations that would Nursing homes require more direct care hours for residents.

Republican spokesmen in the House and Senate confirmed that caucuses would consider the proposal and continue investing in nursing homes, but did not provide details.

In 2020, Spotlight PA reported on Long-awaited recruitment and training regulations affected by the epidemic. Shamberg said the PHCA found that in addition to rising costs nationwide, nursing homes face these same problems today.

Since the beginning of the pandemic, the state has allocated nearly $500 million to nursing homes through Acts 24 of 2020 and 2021. The money was intended to help ease the burden of additional costs related to COVID-19. But in the form of one-time payments, the PHCA said the money did not address Medicaid’s reimbursement rate gap, and therefore did not increase staffing.

Staffing rates are very high — with certified nurse assistants caring for 20 to 30 patients, at and visiting facilities she worked, said Karen Heebel, a licensed practical nurse at Oil City Healthcare and Rehabilitation Center in Venango County. She said that increasing the number of employees should be a top priority, which requires more funding.

Hebel blames the low wage shortfall many workers face in nursing homes. according to Data from the US Bureau of Labor StatisticsThe median nurse assistant wage is $16.44 an hour.