Anzelc and Saxhaug to hold forum at Good Samaritan, By TRINA SEVERSON, Staff Writer

Representatives to hear concerns about nursing facility funding

Good Samaritan Society will play host to a forum Monday to discuss state funding for nursing homes and its affects on long-term care.

Minnesota Rep. Tom Anzelc and Sen. Tom Saxhaug will be speaking in the facility’s main dining room from 4 p.m. to 5 p.m. Following the address, the Minnesota representatives will field questions and concerns from staff, residents and the public.

Main topics to be addressed include the facility’s cost of living adjustments for fiscal year 2009, a health care staffing crisis in rural Minnesota, and a funding gap between Medicaid costs and reimbursements from the state.

The gap between Medicaid reimbursement and allowable Medicaid costs for Minnesota nursing homes this year is about $25 per Medicaid patient per day, according to the 2007 Report on Shortfalls in Medicaid Funding for Nursing Home Care. This translates into $167 million total in 2007 for Minnesota care centers. The daily average cost for the state is nearly double the national average of $13 per patient per day, ranking Minnesota fourth out of 38 participating states and District of Columbia for having the largest gap between Medicaid reimbursement and allowable Medicaid costs.

Minnesota law requires all nursing facilities within the state to cap charges of private-paying residents at the rate Medicaid pays for similar services. Termed rate equalization, this law is unique to certain states such as Minnesota and North Dakota and was established to prevent nursing homes from discriminating based on peoples’ payer source. It was enacted to ensure that nursing homes in Minnesota can only charge the established Medicaid rate for people that have the resources to pay for their care privately. As a result, nearly all of the payment rates for state facilities are government-controlled.

A state with rate equalization needs a cost coverage of about 97 percent to maintain financial health, the report states. Minnesota’s cost coverage for 2007 is estimated to be 85 percent. North Dakota, the only other state with the rate equalization law, is estimated to have a cost coverage of over 99 percent.

Bridging the gap

In an effort to bring reimbursement back in line with the actual costs of providing services, congress this year passed a rebasing bill. Good Samaritan Society-International Falls has been dealing with this funding shortfall for years, and each year the gap grows even larger, officials there say. 

“Nursing home reimbursement has not been adjusted to actual costs since 1995,” said Adam Coe, administrator at Good Samaritan Society. “And because all nursing home rates are controlled and set by either the state or federal government, it is important that this happens on a regular basis.”

“The problem with the bill is that it drags out the rebasing over the next 8 years,” Coe says, “and any financial relief for our center only comes in the last two years. My fear for our center — and centers around the state — is that this bill is too late. Any relief is too many years away.”

Coe says each nursing home has different reimbursement rates based on factors such as actual operating costs and property costs.

“For the last 12 years, our reimbursement has been based on our costs in 1995. We were able to keep our costs low at that time —but we have paid for it for the last 12 years,” he says.,

Other nursing homes that reported higher costs in 1995 were able to receive higher reimbursement, he said.

“The minimal yearly percentage of  increases the facility has received doesn’t come close to keeping up with inflation,” he said. “So the gap between our center and other center’s reimbursements continues to grow.”

The proposed budget for fiscal year 2008 awards a 1.87 percent cost of living increase to private nursing facilities — but a 3.25 percent increase for state-operated facilities, according to information released by Care Providers of Minnesota.

The group says that at recent meetings of the House Nursing Home Working Group in Faribault and Twin Valley, care providers testified about things their facilities had done to cope with the funding shortfall. Cutting staff wages, hours, and benefits, as well as tapping reserves, have also contributed to the loss of employees to hospitals and clinics that pay higher wages, according to the group.

““Good Samaritan Society – International Falls has a daily reimbursement gap of $16-25 per person per day, compared to other nursing homes in our region,” said Coe. “With about 65 patients served daily, this gap amounts to over $375,000 of revenue per year for us.”

According to the center’s figures, Good Samaritan Society in the Falls has the eighth lowest reimbursement in the state for operating rates, and ranks 384th out of the state’s 389 skilled nursing facilities.

“The six percent total increase that we’ve received since fiscal year 2003 is actually less than inflation,” said Coe.

Many of the adjustments for lost revenue have been made in the form of reduced facility staff and lower wages. For the more than 100 employees Good Samaritan retains, wage increases have been less than a total of 25 cents since 2002. And wages for similar jobs at other health centers in the area, such as the clinic and hospital, outcompete the long-term care facility by as much as $7 or more per hour.

“Therefore, we struggle to recruit and retain needed staff to provide for our residents and seniors of the community,” said Coe. For example, the center reports a 75 percent turnover in certified nursing assistants last year.

“These workers have the toughest job in our center and they need to start being paid accordingly,” said Coe.

“The seniors of this community and the dedicated staff that care for them deserve better,” he said. “Anzelc and Saxhaug have been supportive of our situation, but it’s time that our legislators and governor take some ownership and accept some responsibility for the conditions of the nursing homes across the state. They are the ones that have the ability and power to make changes.”

For statistics, figures, and a listing of reimbursement rates for Minnesota nursing homes, visit  http://nhdb.dhs.state.mn.us/agingnh/Search.asp

A complete pdf copy of the Shortfall report is available at the American Health Care Association’s Web site at: www.ahcancal.org/research_data/funding