Senior Living Lobbyists: The Dark Side of Healthcare Reform

The healthcare reform initiatives sweeping the nation are sure to have an impact on the senior living industry, and they won’t all be positive, lobbyists say.

Although President Obama’s Affordable Care Act (ACA) was scored by the Congressional Budget Office as achieving cost savings of $100 billion, the bill is expected to cost trillions more down the road, said Jordan Bernstein, executive vice president at government relations firm Cassidy & Associates, during the Assisted Living Federation of America’s 2013 Conference & Expo.

“They have the ability to backload things,” Bernstein said of the Department of Health & Human Services, noting a $500 billion cut to Medicare spending in a 10-year span contained in the ACA.

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While those “savings” are most achieved by reducing reimbursements to healthcare providers as opposed to Medicare beneficiaries, it will still affect senior living residents.

The Balanced Budget Act of 1997 included a Medicare Sustainable Growth Rate to control spending on physician services. However, Congress has suspended or adjusted the control mechanism for the last 16 years, known as the ‘doc fix.’ If there’s a year when the SGR conversion is not repealed, doctors will see 30% less reimbursement for Medicare patients, according to Bernstein.

“Fewer doctors will be interested in taking Medicare residents” if there’s no doc fix, he said. “They don’t want to cut doctors’ pay, but think that if they cut hospital reimbursements there’s no impact. That’s not true.”

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Already, providers are indicating their residents are having difficulty finding primary care physicians who accept Medicare beneficiaries, Bernstein noted after informally polling session attendees.

What’s going on, he said, is essentially “death by a thousand cuts” in Medicare. Hospitals, doctors, and skilled nursing providers are all impacted along with the senior living industry at large.

“They think there’s going to be no impact, but you’re going to see it in your communities with your residents and their access to healthcare,” Bernstein said.

As a result, he believes the role of nurse practitioners and physician’s assistants will grow larger as states start changing what they’re allowed to do. Nurse practitioners will be able to provider services similar to what doctors do now, he predicts, while PAs may take on more of a nurse practitioner role.

Cuts won’t be the only thing wrought by healthcare reform: the law contains additional expenses for employers, too.

“[Providing health insurance] for employees will affect [senior living providers’] bottom line,” Bernstein said, adding that NASDAQ and Wall Street will feel the pain as employers’ costs go up.

Medicaid expansion is “huge” issue, says Donna Denison, vice president, Cassidy & Associates.

“How will healthcare reform implementation work when some states are expanding their Medicaid program, while others aren’t?” she said. “We’re a long ways from [knowing]. In the meantime, employers will have to figure that out: whether they’ll cover employees, or whether employees will opt-out.”

Even though Senator Max Baucus (D-Mont.), one of the Affordable Care Act’s authors and main supporters, predicts the implementation of the reform law will be a “huge train wreck” if it’s not set up and administered properly, it’s extremely unlikely the law will be repealed, Denison said.

“It’s a scary time,” said Bernstein of all of the Affordable Care Act’s unknowns for senior living providers. “We keep hoping for the eureka moment.”

Written by Alyssa Gerace

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  • Does this mean it is not a good idea to sell my home and move to a continuing care community. I am still independent?

  • This article makes it seem as if the only thing important were the bottom line of senior care providers… It makes no mention of the millions of uninsured people who will be able to afford insurance due to healthcare reform…It makes no mention of the fact that every year in America thousands of people die due to lack of insurance, and Healthcare Reform will largely prevent this…

    The crux of this article is saying the Medicare cuts implemented to help pay for Obamacare suck. But these cuts are old news and this isn't suddenly the "Dark Side of Healthcare reform"… What's more, the President's oppositions, the Republicans, have plans for Medicare that are very very bad…They want to gut Medicare and turn it into a voucher program that will leave in such a way that beneficiaries paying much much more… I suppose the senior care industry would prefer this, though, because it hurts patients more than the industry…

    Also, the author shamelessly took Senator Baucus's quote out of context. Baucus said, "UNLESS WE IMPLEMENT THIS PROPERLY, it’s going to be a train wreck." That's a lot different than predicting a train wreck. He is talking about getting this set up right over the next few months, not predicting failure. What you wrote is misleading.

    Half of nursing homes (i.e. LifeCare) are already defrauding Medicare, so it's a bit silly of them to complain about reduced reimbursement rates. If providers hadn't been abusing the system and committing Medicare fraud all these years, the reduced reimbursements might not have even been needed…

    We know the senior care industry doesn't care about society at large so much…only about bottom lines…it's not their fault…nature of capitalism…most businesses are like that…Providers hate Obamacare, hates unions, they hate anything that might better the quality of lives of regular people at the expense of their profits… It's ugly and greedy…

    This article is a confused scare piece…

    • Hi — I wanted to address your comment about Sen. Baucus's quote. I went back and added some context; thanks for bringing it to my attention.

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