Avalere Analysis: Iowa Seniors Face Estimated $30 Million 2013-14 Reduction in Medicare-Funded Nursing Home Care

U.S. Nursing Homes Face $65 Billion Ten Year Reductions Due to Budget, Regulatory Payment Changes; Iowa Facility Administrator Expresses Concern About Staffing Pressures and Threat to Quality Patient Care

DES MOINES, Iowa, Aug. 7, 2012 /PRNewswire/ -- A new 50 state data analysis projects Iowa nursing homes and the patients under their care face a $30 million cumulative reduction in Medicare funding in 2013-14 as a result of several different federal budgetary actions and regulatory payment changes made by Congress and the Centers for Medicare and Medicaid Services (CMS) since 2009. Nationally, nursing homes and their patients face nearly $4 billion in reductions in 2013-14, and a staggering $65 billion reduction over 10 years, according to the independent health policy advisory firm, Avalere Health. Nursing homes, technically referred to as skilled nursing facilities (SNFs), are Iowa's second largest health facility employer.

In differentiating the impacts of different budget cuts and regulatory payment changes that result in less cumulative government funding, the Avalere analysis, funded by the Alliance for Quality Nursing Home Care, will be utilized to help inform Iowa policymakers how the successive battery of federal funding reductions undermine facility operations, disrupt staffing, and threaten Iowa seniors' care amid the growing influx of older, higher acuity patients – increasing numbers of whom are able to return home after successful rehabilitation.

The Avalere analysis, the first retrospective national and state-by-state look at recent reductions in Medicare payments to facilities, projects the 2013-14 budgetary impact on Iowa based on the of the following major government actions since 2009: Affordable Care Act (ACA) productivity adjustment ($10.8 million cut in 2013); Case-Mix Adjustment in FY 2010 CMS Rule ($11.2 million regulatory reduction in 2013); Forecast Error Adjustment in FY 2011 CMS Rule ($2 million regulatory reduction in 2013); Sequestration provision of Budget Control Act ($6.6 million cut on January 1, 2013); Bad Debt provision in March 2012 Middle Class Tax Relief and Job Creation Act ($3.1 million cut 2012-14 beginning October 1, 2012). Cumulative state-by-state breakdown and methodology notes available at www.aqnhc.org.

"Iowa seniors, caregivers and facilities have already been hit by a series of highly destabilizing federal funding cuts and regulatory payment changes over the past several years – and still more cuts present a situation whereby the load of cumulative reductions becomes just too much," said Kim Hufsey, administrator at ManorCare Health Services – Utica Ridge in Davenport. "We are caring for rising numbers of patients, requiring higher levels of care, and doing so with a workforce under severe stress. More Medicare cuts from Washington – which we will see again in October, and again in January -- hurt our ability to keep sending more and more patients home as quickly as possible."

Alan G. Rosenbloom, President of the Alliance, said that with nearly 70 percent of facility expenses related to staffing, the impact of federal Medicare cuts combined with a fragile state Medicaid system causes significant difficulties in regard to hiring and retaining the direct care staff that help make a significant difference in care quality and patient outcomes. "Some facilities are forced to consider reducing salaries and defer or alter benefits due to cumulative funding reductions, and this places them at a significant competitive disadvantage in the local labor market with other potential employers, especially in rural states like Iowa," he continued. "The growing threat to quality care due to pressures on staffing cannot be ignored."

Concluded Rosenbloom: "The unintended consequences of these cuts and regulatory payment changes will affect access, quality, and require that care increasingly be rendered in settings that actually increase the cost to government. This makes no sense, and is wrong for seniors, providers, taxpayers and the future of our entire U.S. health care system."

Contact: Ellen Almond

SOURCE The Alliance for Quality Nursing Home Care