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Hill Democrats Offer Nursing Homes More Money, But Demand Reforms In Return

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Until now, the Biden Administration and congressional Democrats have focused on Medicaid’s home-based long-term care program. This week, powerful Hill Democrats turned their attention to nursing homes. And they are offering a tough bargain: More funding in exchange for significant staffing reform. They also are proposing a major federal initiative to encourage the development of small group homes as an alternative to the much larger facilities that are common in the industry.

The proposal, called the Nursing Home Improvement and Accountability Act of 2021, is sponsored by Senate Finance Committee Chair Ron Wyden (D-OR), Senate Aging Committee Chair Bob Casey (D-PA), as well as senators Richard Blumenthal (D-CT),  Michael Bennet (D-CO), Sheldon Whitehouse (D-RI)  and Sherrod Brown D-OH).

It would:

·        Boost the federal Medicaid payment to states for the next six years: by three percentage points for the first four years, two points over the next year, and one point for the last year.

·        Require that the funds are used to expand and improve staffing, increase staff pay, and “support and improve resident care.”

·        Require a registered nurse on duty 24/7.

·        Require facilities to hire a full-time infection control specialist.

·        Require nursing facilities to report more accurate quality and staffing data to the government.

·        Fund a study to determine whether the government should set minimum staffing ratios at nursing homes.

·        Ban facilities from requiring residents to sign pre-dispute arbitration agreements.

·        Create a $1.3 billion demonstration program to encourage construction of care facilities for 5-14 residents. These appear to be roughly modeled on, but not the same as, Green Houses.

The bill is in some ways modest, in that it maintains the basic structure of facility-based long-term care. Yet, within that traditional model, it would require the industry to make significant changes in exchange for additional Medicaid funding.

More Medicaid Funding

Biden and many Hill Democrats have been pushing all year for a major increase in federal funding for Medicaid’s home and community-based care program (HCBS). In March, Congress approved about $12 billion in additional Medicaid payments for 2021 and Biden has proposed $400 billion in further funding over the next eight years.

Congress is not likely to approve an increase that large (my betting is it will eventually go for about half that amount). But the massive $3.5 trillion domestic spending initiative now working its way through Congress could well include an HCBS boost. And now, perhaps, more money for nursing homes—though with strings attached. Adding those extra federal dollars could win that industry’s support for the bill.

Nursing homes have been demanding their own Medicaid funding increase, arguing that they cannot provide quality care for the limited payment they receive from Medicaid. While rates vary by state, the average daily payment is about $200 for each long-stay nursing home resident.

The trade-off

Wyden and Casey are saying, in effect, “We will give you more money, but we want to be sure you use it to improve quality of care and not boost your margins. Or, in the case of for-profits, increase returns to your investors.”

The American Health Care Association and the National Center for Assisted Living (AHCA/NCAL), the trade group that represents for-profit and some non-profit facilities, said it will lobby for more and permanent Medicaid funding and oppose key provisions of the Wyden-Casey bill, especially the ban on arbitration agreements.

These agreements require residents to submit disputes to an arbitrator rather than take facilities to court. Supporters say the agreements are a faster and more efficient way to resolve disputes. Critics say arbitrators are biased in favor of nursing home operators.   

In the House,  Ways and Means Chair Richard Neal, D-MA., and Energy and Commerce Chair Frank Pallone (D-NJ) reportedly are working on a companion measure to the Wyden-Casey bill.

Their bill increases the chance that Congress will boost  funding and enact some reforms to Medicaid’s long-term care program. It remains to be seen whether lawmakers will address the needs of those millions of Americans who need long-term services and supports but are ineligible for Medicaid.

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