Long-term-care provider groups say the governors' compromise Medicaid reform plan will result in fewer elderly eligible for Medicaid and lower payment rates, jeopardizing the quality of care in the nation's nursing homes.
The National Governors' Association earlier this month approved a compromise Medicaid reform plan that guarantees nursing home coverage for poor, disabled elderly (Feb. 12, p. 2). The plan, however, will give states more authority over nursing home payments and who qualifies for Medicaid coverage.
In addition to allowing states to set Medicaid reimbursement rates, the governors' compromise proposal eliminates the so-called "Boren amendment"-named for former Sen. David Boren of Oklahoma-which required that states pay providers "reasonable and adequate" rates.
It would seek to rein in the federal government's cost growth by basing yearly expenditure increases largely on changes in caseload, case-mix and inflation.
That formula would be backed up by an "umbrella" fund that would increase federal payments to states for unanticipated increases in the Medicaid population. Funds would be paid on a per-beneficiary basis.
The governors said savings to the federal government would fall between President Clinton's proposed savings of $54 billion over seven years and the congressional Republicans' $85 billion over seven years.
With the threat of reduced payment rates, however, nursing homes may be forced to make reductions in their staffs, which represent a majority of the cost of operating nursing homes. That, in turn, could affect quality of care, said Dave Kyllo, spokesman for the American Health Care Association.
Kyllo said that possibility conflicts with other goals of the governors plan, such as the retention of federal nursing home quality standards enforced by the states. "The link between standards and reimbursement level is gone," he said.
Eligibility, meanwhile, could be reduced in some states. Barbara Gay, congressional affairs director for the American Association of Homes and Services for the Aging, said many nursing home residents on Medicaid are considered "optional" recipients under state programs.
Under the governors' proposal, the federal government no longer would increase its grants to the states to help cover optional recipients, eliminating states' incentive to cover optional populations, Gay said.