Wednesday, December 26, 2012

Can nursing homes afford Medicaid?

Medicare, Medicaid patients and certification fraught with complications

Express Staff Writer

From left, Jo Tropea and Dorothy Feder share a laugh at Blaine Manor skilled-nursing facility in Hailey last week. Many patients at Blaine Manor are on Medicare and Medicaid, but caring for such patients can lead to uncertain revenue projections and even losses. Photo by Roland Lane

Providing senior care for residents of Blaine County of all income levels has been a major theme in Blaine County commissioners’ discussions about what sort of skilled nursing facility would be best for the county. 

But complicating the issue are the factors that determine not only the ability of a facility to take patients receiving aid from the state or federal government, but its ability to remain financially stable while doing so.

Robert Vande Merwe, executive director of the Idaho Health Care Association, told Blaine County commissioners earlier this month that Medicare and Medicaid—programs that help seniors pay for medical are—are unsustainable in the long term, and that facilities accepting these patients will see the amount of public funding they receive for those patients drop.

“The longer we wait, the bigger the problems become,” he said.

Blaine Manor Finance Director Stephanie Jazkowski said in an interview last week that 5 percent of her patients, who all require skilled nursing, pay through Medicare. Medicare is the federally funded program for seniors that pays for rehabilitation or short-term skilled nursing care.

“Say you are elderly, you suffer an event like a fall and you break a hip,” she said. “After a three-night stay at a hospital, you become eligible for Medicare type A skilled nursing benefits.”

Skilled nursing care under Medicare type A is free to the patient for the first 20 days, and patients must pay a co-pay for the next 21 to 100 days, which can be picked up by Medicaid if the patient is eligible for both programs.

Jazkowski said another 60 to 70 percent of Blaine Manor’s residents pay for their care through Medicaid, a state-administered program that assists those in financial need with long-term care. The balance of the patients are private pay, she said.

However, while the amount that each private-pay patient is charged remains steady—about $7,200 a month, sometimes up to $8,000 a month for complicated cases—Jazkowski said the amount that the state and the federal government pay Blaine Manor and other facilities is less than the cost of providing care.

She said most facilities can spread the losses over the cost of operating an entire facility so long as it includes the less expensive assisted living.

Fixed costs can be spread among a larger facility, and revenue from independent living or assisted living residents can help make up the difference between what it costs to take in Medicaid and Medicare patients and what the state and the federal government provide.

Vande Merwe said many facilities in Idaho—such as one owned by TanaBell Health Services in Pocatello, a company that has proposed taking over Blaine Manor—have switched to a Medicare-only model, as reimbursement rates are higher for more acute patients, such as those who have recently suffered a fall or other injury. However, he said, that type of facility might not be possible in Blaine County.

“You need to be in a [big enough] community that can sustain that,” he said.

Commissioner Larry Schoen said the unsustainability of Medicare and Medicaid causes major problems for nursing homes, and especially for the commissioners who must decide if a company’s proposals for senior care are viable in light of a possible collapse of public funding.

“How can you plan ahead?” he said.

Eliminating Medicare and Medicaid patients might be a solution, he said, but it’s one that would not fit the county’s goals.

Despite the problems with Medicare and Medicaid reimbursements, the plans of all three companies that have proposed facilities in Blaine County include taking over Blaine Manor’s facility license as well as its Medicare and Medicaid certifications.

Pocatello-based TanaBell Health Services, Pocatello-based Safe Haven Health Care and locally based Croy Canyon Ranch Foundation all propose taking over the operations of Blaine Manor for a time. TanaBell proposes keeping all patients at Blaine Manor and expanding into assisted living, while Safe Haven and Croy Canyon Ranch would transfer the patients—and license and certifications—to a new facility.

Some might ask, why bother taking over one facility only to move everything to another one? It all has to do with reimbursement rates, Vande Merwe said. A new skilled nursing facility in Idaho can be licensed so long as it meets certain standards, but receiving Medicare and Medicaid certification can take up to a year—and the facility must be up and running with full staff to be considered for certification.

“They have to be open, and they have to have two patients,” he said, but those patients cannot be Medicare or Medicaid. He said that usually means that the facility runs at a “tremendous loss” for up to a year before it can take in Medicare and Medicaid patients. 

Vande Merwe said that once certification is gained, the facility must also endure three full years under a Medicaid reimbursement rate based on the state average rather than on the actual cost of caring for the patients or keeping the facility’s doors open.

But by buying an existing facility and taking over operations, a new company could also take over the license and certification relatively seamlessly, he said.

Scott Burpee, CEO of Safe Haven Health Care, said he would take over operations of Blaine Manor for roughly a year. He said his company has participated in this type of transfer before, and that he helped draft the legislation allowing for this type of transfer in 2000.  However, he said, his proposal allows for the possibility of not taking over Blaine Manor.

“We’ve designing our deal to work either way,” he said.

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