Medical director Dr. Azhar Sheikh, administrator Dennis Burtnett and employees met with DesJarlais, R-4th District.
Sheikh said the biggest problem was maintaining the level of quality care with reduced funding. It is the biggest issue facing skilled nursing facilities.
Burtnett noted the big issues are Medicare and Medicaid funding, observation stays and the unchecked authority of the Centers for Medicare and Medicaid Services. Also, unfunded regulations placed on nursing homes limit their ability to pay for them.
“When they give us something new, we really don’t have much money to implement it,” he said. “This year, we’ve seen a 2 percent decrease in Medicare because of sequestration.”
DesJarlais said the penalty for not finding a compromise on spending cuts was to punish senior citizens and the Department of Defense.
“That was what was going to incentivize the supercommittee not to fail because no one wanted to mess with seniors’ money or defense money so the supercommittee couldn’t fail. Ultimately, it did fail, which caused across the board cuts to kick in on Medicare. Also, under the new health care law, I think there was a fairly large cut and a shift of funds to health care exchanges to fund the 30 million uninsured.”
Ironically, the congressman said 30 million other people are replacing the 30 million people the Affordable Health Care Act was supposed to cover. People who have insurance are going to drop out because of the increased premiums and pay the IRS penalty instead.
“The Congressional Budget Office rescored that and guess how many people are not going to have insurance once the law is implemented? 30 million,” he said. “Depending on your income bracket, it can cost as little as $100 not to have insurance because it is cheaper than the $4,000 increase in premiums. People who had insurance are dropping it and that’s where the new 30 million uninsured are coming from.”
As with any government program, DesJarlais said the Affordable Health Care Act is not working out very well. He acknowledged the cost of technology has advanced beyond the ability to pay for it, people are living longer and health care would still be a problem with or without the new law.
“I don’t know what the answer is going to be, but the federal government trying to manage it is probably not the answer. They don’t do too many things very effectively and they are bad to overregulate. You guys see that,” he said.
Burtnett said the provider bed tax has been in effect for about 20 years in the nursing home sector, but only recently implemented in hospitals. The tax is a mechanism for raising money for state Medicaid reimbursements to provider. The tax is assessed against the provider by the state. The federal government then matches the state funds.
“You take away the provider tax and most states would be screaming that they couldn’t cover the cost of reimbursement when it comes to Medicaid,” he said.
The name of the tax was changed from a bed assessment tax to a nursing home assessment fee.
“Most providers agree with this tax because it’s a way to raise money for Medicaid reimbursements.
“There has been constant threats over the years that the federal government would take that away, but I don’t think they realize what would happen if they did. It would be chaos trying to pay health care providers,” Burtnett said.
Bradley Healthcare and Rehabilitation Center pays about $444,000 a year or about $2,200 per bed.
“It is a good thing and we’re very supportive of it,” Burtnett said.
He said the increased use of observation days used by hospitals constrains the Medicare status of nursing home patients. Medicare covers up to 100 days of skilled nursing facility care per episode of care, following a qualifying three-day inpatient hospital stay.
According to an issue brief published by the American Health Care Association, the observation status used by hospitals is technically deemed an outpatient service while patients are often in the hospital for several days. Between 2007-2009, hospital use of observation stays increased 25 percent. Patients in observation status stayed in the hospital longer with an 88 percent increase in the number of patients staying at least 72 hours, which is well past Medicare's recommended 24-48 hours for this status.
If Medicare skilled nursing facility coverage is denied due to extended time spent in observation status, the average post-acute SNF stay could result in a patient's out-of-pocket costs totaling many thousands of dollars.
Legislation in Congress (H.R. 1179/S. 569) would deem an individual on observation status as an inpatient with respect to the Medicare three-day stay.
DesJarlais said a patient needing nursing care can go to a doctor, but the physician cannot admit the patient to the nursing home because of a waiting list.
“However, if you were admitted to the hospital for three days, then you could be admitted directly to the nursing home and move to the head of the line,” he said. “I would like to see observation days go away altogether.”
Burtnett agreed that would be the best solution, but previous legislative attempts were unsuccessful.
Sheikh said hospitals don’t like observation days because they are reimbursed at a lower rate.
According to an American Health Care Association brief, the federal government requires a co-pay after the 21st day of a Medicare-qualified stay in a skilled nursing facility. Many dual eligible are unable to pay, as they are poor and account for 90 percent of the bad debt incurred by SNFs.
Per the Medicare formula, the state Medicaid program is allowed to pay a reduced copay or none at all. SNFs have no legal remedies to receive the remaining balance because of Medicare and Medicaid laws.
For that reason, the federal government reimburses SNFs for the debt to ensure facilities can continue providing care to vulnerable seniors.
Burtnett said Congress should maintain the lifeline to SNFs and protect access to care for the frail elderly.