The timing of Vencor's bankruptcy couldn't be better for the nursing home lobby, which has hounded Congress all year for a rollback of some Medicare payment reductions.
Vencor, a for-profit nursing home operator based in Louisville, Ky., is blaming its financial woes on "dramatic changes in the industry," most notably the Medicare changes in the Balanced Budget Act of 1997 (See related story, p. 6).
The law required Medicare to pay nursing homes using a prospective payment system, which went into effect in July 1998.
The nursing home lobby, which is pushing Congress to plump up their payments under the PPS, is now using the bankruptcy to show what the PPS could do to the entire industry.
"(The bankruptcy) hasn't changed what we think Congress should do or the time frame in which we think they should do it," said Linda Keegan, vice president of the American Health Care Association, a group of 50 nursing home organizations. "What (the bankruptcy) has done is heighten the awareness of the severity of the crisis and the impact it is having on the industry, especially for many members of Congress who have been skeptical."
Even private not-for-profit homes believe the bankruptcy could aid their cause.
"I do think Vencor will call attention to what our group and others have been saying all along," said Robert Greenwood, spokesman for the American Association of Homes and Services for the Aging, an advocacy group of not-for-profit homes. "The PPS needs to be amended, and more money needs to be added into the system to care for the most complex medical cases."
Capitol Hill has certainly taken notice. On Sept. 14, the day after Vencor announced the bankruptcy, about 100 Capitol Hill aides attended a briefing by HCFA and the U.S. Justice Department on the impact of the filing.
Some members of Congress are waiting for a report from the General Accounting Office, Congress' investigative arm, before they decide if and how the PPS should be changed. The report, due by the end of the month, will examine the impact of the PPS on nursing homes.