New Lewin Group Analysis: Medicare Cuts for Nursing Facility Care Could Have Economic Impact Up to $4.2 Billion, Threaten Jobs

WASHINGTON, May 1 /PRNewswire-USNewswire/ -- A new analysis from the Lewin Group underscores the significance of skilled nursing facilities (SNFs) to the nation's economic activity. In reacting to the data, the American Health Care Association (AHCA) said potential Medicare cuts expected in a forthcoming Centers for Medicare and Medicaid Services (CMS) rule present a direct threat not just to the care of America's frail, elderly and disabled - but also to America's local, state and national economies, employment base and tax revenues.

"As it is appears to be the intent of CMS to proceed with regulatory-driven cuts to Medicare-financed nursing home funding, we intend to make it crystal clear to federal, state and local officials that the proposed cuts not only threaten seniors' access to quality care nationwide, but will also negatively impact the economy and employment base," stated Bruce Yarwood, President and CEO of AHCA. "From our perspective, and as the data confirms, the CMS-driven 'Forecast Error' Medicare cuts represent a 'lose-lose' proposition for seniors' care needs as well as the U.S. and local economies."

The Administration's estimate of the "Forecast Error" represents a direct cut of $720 million in economic activity in the first year. Using the IMPLAN(R) model database and software, which can create extremely detailed, community impact analyses, the Lewin Group estimates that the potential cut of up to $720 million would result in a total economic impact of $4.2 billion in the first year. In addition, a $720 million reduction in funding for long term care facilities will impact more than 40,700 jobs, over $1.6 billion in wages and salaries, and approximately $618 million in tax revenue in the first year alone.

"On every level, the CMS actions cutting Medicare funding are conceptually flawed," stated Yarwood. He also noted the fact that the Center on Budget and Policy Priorities issued a new report this week finding 31 states expect budget problems in the year ahead, and that some states have already adopted new or revised budgets that address their expected future shortfalls. "Inflicting further damage on a slowing U.S. economy, and hindering the ability of states to collect revenue to finance key priorities is yet one additional consequence of this misguided policy."

Contact: Susan Feeney

(202) 898-6333

SOURCE American Health Care Association

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