Lawmaker: Declining Nursing Home Bed Count ‘What We Wanted’

Medicaid-rate shortfalls and other struggles have claimed more than 30 nursing homes in Washington state since 2010, and at least one lawmaker thinks that the pruning is necessary.

State Rep. Eileen Cody, who chairs the state’s House Health Care and Wellness Committee, said a drop in available nursing homes beds is “what we wanted as a legislature,” according to a wide-ranging report on skilled nursing facility closures in Washington state from non-profit public journalism outlet Northwest News Network.

“As a baby boomer, I don’t want to go into a nursing home and nor does anyone else,” Cody, a Democrat, told the network.

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Washington’s nursing homes have been dealing with low Medicaid rates for years, and Washington Health Care Association president and CEO Robin Dale declared the situation a “crisis” last fall.

“At this point I can’t even tell you how they’re coping. That’s how bad it is,” Dale told Skilled Nursing News in September 2018.

The state overhauled its Medicaid math for nursing homes in 2016, essentially paying out a flat rate for services with some adjustments for acuity. Providers claim that the new structure is insufficient to cover the cost of care, as some operators have costs that far outstrip the base-level reimbursement rates.

“With 210 or so facilities in the state, that means half of those facilities have costs that are above the median and half of the facilities have costs that are below the median,” LeadingAge Washington CEO Deb Murphy told SNN last year. “But the median is used to set the price the state is willing to pay for the cost of care.”

Starting in July 2020, the state will re-base its Medicaid rates to raise the average daily reimbursement from $216 to $251, or 16%, according to Northwest News Network — though Dale warned that it still might not be enough.

“Our fear, as we already know, is that some facilities can’t make it that far,” Dale told the outlet.

The boost would also be too late for the 16 facilities that have already closed their doors or abandoned skilled nursing services since February 2017, according to the Washington Health Care Association — with a loss of 960 skilled nursing beds, the outlet reported.

For comparison, providers in neighboring Oregon will begin receiving $326 per Medicaid patient day next month. But Cody insisted that the nursing home closures sweeping the state weren’t solely the fault of low rates, pointing to the widespread availability of community-based options for long-term care.

“I will tell you, the history is they always want more money,” Cody said of the nursing home industry. “They always say they’re going broke.”

She also stopped short of calling the situation in Washington state a crisis.

“It’s certainly something that we are going to pay attention to, but I don’t think it’s a crisis,” she told the outlet.

Cody’s comments highlight a fundamental tension in nursing home funding debates all across the country: As consumers increasingly demand more community-based care options, and governments and payers seek lower-cost options for care, siphoning money away from nursing homes could seem like a sound policy decision.

But for the buildings that remain, reduced Medicaid funding creates difficult decisions. In Wisconsin, another state frequently mentioned as among the worst for Medicaid rates, overall funding numbers are based on the total number of operational beds in the state. So nursing home closures — which currently total 27 since the start of 2016 — create a vicious cycle that lead to further reductions in rates.

“Facilities are not able to maintain their operations, so they close their doors, and there are fewer Medicaid beds, and that means there ends up being less allocated in the payment formula for nursing homes,” Wisconsin Health Care Association president and CEO John Vander Meer told SNN back in April.

While home health and other community-based services — such as adult day programs — have made great strides in meeting the acuity needs of the patients they serve, nursing home advocates continue to stress that there will always be some seniors who require institutional nursing care. That population could only grow as the baby boom generation ages: Washington state officials predict that the number of nursing homes beds will need to double by 2035 to match the coming demand, according to Northwest News Network, while Wisconsin industry leaders project that demand will exceed supply by 2027.

“People can’t receive 24-hour nursing care in the home setting or in an assisted living setting, so there’s going to be a bottoming out,” LeadingAge Wisconsin vice president of financial and regulatory services Brent Rapos told SNN last month. “There’s going to be a time where if you take nursing homes completely out of the picture, then those people are going to be receiving that same care in a hospital, because that’s the only other setting currently that exists.”

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