Voters Could Decide on Medicaid Nursing Home Rate Increases in Massachusetts

A ballot initiative that would overhaul the way Massachusetts’s Medicaid program pays for nursing home services last week moved one step closer to reaching voters.

The office of state attorney general Maura Healey certified a nursing home reimbursement proposal among other potential ballot questions for Bay State voters to consider in 2020, local NPR station WBUR reported.

If passed, the initiative would prevent MassHealth, the state’s Medicaid program, from basing reimbursements on reported costs more than two years in the past. In addition, the law would mandate that Medicaid nursing home rates “be sufficient to pay all allowable costs of caring for beneficiaries of the state’s MassHealth program,” as well as cover any implementation costs associated with new federal or state regulations.

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That’s a significant shift from the current system, in which MassHealth uses a base year of 2007 when calculating the payments to nursing homes, with 1% increases instituted each year thereafter.

Earlier this year, the Massachusetts Senior Care Association sounded an alarm over insufficient Medicaid reimbursements, blaming the low rates for a wave of 20 nursing facility closures in the Bay State over the previous year — with 35 more identified as at risk of shutting their doors.

The average building loses $1 million on Medicaid residents, according to the trade group, with an overall margin of negative 1.6% back in 2017.

“Quality care and staffing are directly tied to government funding, and here in Massachusetts, it has been woefully inadequate,” MSCA president Tara Gregorio told Skilled Nursing News back in April.

Back in January, the Worcester (Mass.) Telegram & Gazette reported that the nursing home industry in Massachusetts sits on the brink of “colossal collapse,” citing similarly grim profit statistics: Facilities with a Medicaid census of 50% or above lost an average of 2.1% in 2017, while properties that serve a Medicaid population of 75% or greater finding themselves 3.2% in the red.

The state legislature in July provided a short-term cash influx of $50 million in its most recent budget, but the MSCA pegged the overall gap between nursing home expenses and MassHealth reimbursements at $362 million — prompting Gregorio to predict more closures in an interview with WBUR.

For the latest initiative to reach the ballot, proponents must first gather 80,000 signatures from registered voters, according to WBUR; the state legislature can then choose to take action on the measure itself, or kick it to voters to decide on Election Day 2020, on the condition that they collect additional signatures.