Further Cuts from Super Committee Will Escalate Nursing Home Instability

Healthcare organizations representing community care givers, nursing homes, and long-term care insurance providers are urging lawmakers to preserve funding for their services to avoid further instability in the industry, reports Healthcare Finance News.

A bipartisan Congressional “Super Committee” is charged with trimming $1.5 trillion from the nation’s debt in the next 10 years, and if they fail to do so, automatic cuts will go into effect. These cuts would include Medicare funding and would go beyond the already-announced 11.1% reduction in reimbursement rates, due to go into effect on October 1, 2011.

“This distinguished bipartisan group of lawmakers is charged with a budgetary balancing act of historic proportion, and we respectfully ask that they ensure the most vulnerable seniors in their state, and the jobs of their dedicated caregivers, receive the funding priority warranted,” said Alan G. Rosenbloom, president of the Alliance for Quality Nursing Home Care, in a prepared statement. “The nursing home sector intends to put forward several substantive policy initiatives designed to maximize efficiency in Medicare spending, and we look forward to working with the Super Committee to discuss and implement them.”


The nursing home sector is already experiencing distress, as Standard and Poor’s Rating Service recently put all of its nursing home chains on CreditWatch with a negative outlook. Additionally, Moody’s Investors Service announced it expects future credit downgrades for not-for-profit nursing homes, as a result of decreased profitability from Medicare reductions and the possibility of still more cuts.

Rosenbloom says further cuts in federal program will only increase the nursing home industry’s instability, reports Healthcare Finance News, and the sector is already operating with the lowest operating margins of all provider groups in the country.

“Without exception, each of the Super Committee members have an awareness of the challenge faced by their home state nursing facilities in dealing with the cumulative Medicare-Medicaid funding squeeze, and we will continue to discuss how and why strong funding of each program is integral to preservation of quality care and local jobs,” Rosenbloom said.


Read the full article here.

Written by Alyssa Gerace