Care Center Trustees face state’s Medicaid impact

Posted February 1, 2018 at 6:00 am

By Julie Ann Madden

Editor’s Note: This is the first in a series on Care Center financial impacts.

With Medicaid reimbursement revenue projected to be a loss of $37 per day per Medicaid-recipient resident this year, Akron Care Center Administrator Alan Bruinsma is appealing to voters to talk with their state and federal legislators.

The Iowa Legislature opened its 2018 Session Monday. According to Rep. Chuck Holz, he and Senator Jim Carlin will be hosting some local forums beginning in February.

“It’s really key to get our message across to them — that we can’t just continue to pass these costs on to our private-pay clients,” Bruinsma told the Care Center Trustees at their Dec. 19, 2017 meeting.

In 2013, the loss was $12.65 per day per Medicaid resident, he said, and after a slight loss improvement to $12.21 per day per Medicaid resident in 2014, the loss has increased threefold. In 2017, it was $29.07 per day per Medicaid resident and the projected loss is a jump of another $8 loss in state revenue Medicaid reimbursement for 2018.

Putting the increased cost on private-paying residents only causes them to spend their monies on care faster, which in turn places more residents on Medicaid faster, he said. “Then where are the private-pay people to replace them?”

Plus, with more people choosing Assisted Living options first, they are coming to nursing homes with less monetary resources to pay nursing homes’ daily room rates, he said, explaining some come with their private funds completely depleted, increasing the number of Medicaid residents.

According to state figures, private pay rates have risen from an average of $163 per day room rate in 2011 to $206 in 2017 — a $44 increase in that time.

Explaining the Akron Care Center has a tier of care rate system, “Our rates have gone from $159 – $170 — comparable to the average — to $183 – $195 in 2017. We are now below the state’s average.”

Each of the last two years, the trustees have increased the daily room rates by 5 percent, he said. “These are necessary increases and now that we are starting to fall behind, we have to consider higher room rate increases to try to keep up with what’s going on.”

In 2017, the state Medicaid reimbursement was $172.02 per day but the actual cost of care was $201.09 per day.

Our Medicaid rate is $165.86 per day — up from $152.24 in 2014, said Bruinsma.

In comparison, some of our private-pay people are paying $18 more right now, some are paying $24 more and those at the highest level of care are paying $30 more than the Medicaid rate, he said.

The state’s consensus for skilled nursing facilities is 65 percent or more of Medicaid residents, said Bruinsma, noting the Akron Care Center’s is more favorable with 45 percent of Medicaid residents in the current census.

“A lot of that is because of our building,” he said. “We are very appealing to people, and we attract more private-pay — 54 to 55 percent. But that always fluctuates (with resident admissions and discharges).”

Assisted Living facilities have 99 percent private-pay residents — only 1 percent of Medicaid residents, said Bruinsma, explaining the reimbursement rate for nursing homes is bad but for Assisted Living is even worse — only about $45 per day for Medicaid residents.

Assisted Livings get about $1,300 a day for Medicaid residents so if someone gets $1,000 Social Security, they can charge $950 for room rent. If the resident only gets $500, they can charge them $450 room rent, he said.

“What it really comes down to is who are they going to choose for their Medicaid residents?” said Bruinsma. “They are going to choose the person who has $1,000 (Social Security) because those residents can pay them more rent than the ones who only get $500 — it really makes a denial of care because those (getting $500 Social Security) who need Assisted Living can’t find a place to take them.”

Fortunately, the Iowa Health Care Association is focusing on nursing home facilities with their legislative lobbying.

Medicaid Provider Tax

“Our worst nightmares have gone to fruition,” said Bruinsma, explaining about eight years ago, Iowa started charging nursing home facilities a “Medicaid Provider Tax.” By charging facilities $1.80 per bed, the state could get an extra $8.20 per bed in federal dollars.

State officials told us if we agreed to the tax, then they wouldn’t cut Medicaid reimbursement but they have done exactly that, he said. Federal authorities are talking about dropping the percentage 2 percent so we may see even less reimbursement.

There are also reimbursement concerns, including the Managed Care Organizations which get full funding (to manage Medicaid reimbursements) while private pay residents absorb losses in the millions, said Bruinsma.

Impact on Residents

Struggling with financial stability because of state and federal reimbursement issues, nursing home facilities are being forced to choose residents based on their pay-source — are they private paying or Medicaid recipients?

“That doesn’t feel very good,” said Bruinsma.

Other challenges include:

• Workforce issues — how to attract good staff with less financial resources for wages — we can only charge so much for room rates.

• Making sure people have access to care; and

• The burden we are putting on private-pay people.

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