The Senate’s proposed health care legislation, like the bill that passed the House, includes significant cuts to Medicaid, which is the top payer for skilled nursing services. This presents obvious challenges for SNFs, but also may provide some positive outcomes.
In the first quarter of 2017, 65.2% of patient days were attributed to Medicaid, and the Medicaid patient day mix has been growing over the past five years, according to the latest Skilled Nursing Data Report from the National Investment Center for Seniors Housing and Care (NIC). The Annapolis, Md.-based organization weighed in on the Senate’s bill in a blog post this week.
Legislators and skilled nursing industry representatives have expressed their opposition to the Senate bill, the Better Care Reconciliation Act (BCRA), because of the impact the that planned $772 billion in cuts to Medicaid will have on a large number of residents. However, other provisions of the bill may result in reduced operating costs for SNFs and increased nursing home utilization for Medicaid beneficiaries, the NIC blog noted.
Potential Pros for SNFs
First, the BCRA proposes eliminating the mandate that SNF employers must provide health insurance to employees, which would reduce overall costs of operations.
Additionally, the BCRA could direct more Medicaid-eligible seniors to SNFs due to its elimination of the Community First Choice program, instituted by the Affordable Care Act, which incentivizes states to use home- and community-based services (HCBS) instead of skilled nursing care. Medicaid coverage for HCBS is considered optional, leading some to conclude that the BCRA will reduce HCBS spending, the NIC blog noted.
“An important distinction, however, is that HCBS spending is an optional alternative to nursing home care for people who are on Medicaid and nursing home-eligible,” reported NIC. “Medicaid-funded care for that population is not optional, the setting of care delivery is.”
Pros Become Cons
NIC’s report points out that although HCBS spending has grown over the past 20 years, the Community First Choice waiver was not popular with the vast majority of states. It was not widely implemented, so its elimination will not have that great of an impact on the skilled nursing sector.
Furthermore, with overall Medicaid costs being cut, HCBS could be favored as generally more affordable than institutional care.
One caveat to this point is that for states that do not already have strong HCBS programs in place, the administrative costs of establishing this service delivery option could outweigh the benefits.
Like other organizations that have weighed in on the legislation, NIC emphasized that the specifics are likely to change before any final version is voted on by lawmakers.
“If lawmakers remain intent on repeal-and-replace and reforming Medicaid simultaneously, as is the course both houses of Congress have followed up to this point, then we may anticipate considerable changes to the Senate legislation before a ‘passable’ version of the bill is produced,” NIC concludes.
Written by Elizabeth Jakaitis