‘Who’s Going to Pay for This?’ $272M Medicaid Boost for Nursing Homes Under Scrutiny

Industry advocates in Massachusetts are close to winning a ballot initiative that would boost Medicaid funding for the state’s beleaguered nursing home industry by $272 million, but at least one influential lawmaker was skeptical of the plan’s cost.

The state senate’s Elder Affairs Committee on Tuesday held an open discussion of the plan to increase nursing home funding by altering the way the state doles out reimbursements — and despite testimony from multiple advocates, the cost of the plan raised eyebrows, according to a report from State House News Service.

“Who’s going to pay for this? We don’t have hundreds of millions of dollars unspent in the commonwealth,” Sen. Patricia Jehlen asked during the hearing, according to the report. “If we reject every tax opportunity before us and we accept all of the responsibility ahead of us, how is that going to balance out?”

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The Massachusetts Senior Coalition last fall announced that it had collected enough signatures to put the $272 million funding boost on the 2020 ballot in the Bay State, allowing voters to directly approve or reject the move. Half of that figure would be paid out by the federal Medicaid program, with the remaining coming from the state, according to the news service.

But before state residents can decide, the plan first had to get its day in the legislature, the report noted. Jehlen, the co-chair of the Joint Committee on Elder Affairs and a Democrat, suggested that Massachusetts lawmakers are continually being bombarded by requests to pay out more than the state can afford.

But Thomas Lavallee, chairman of the Massachusetts Senior Care Association, pointed to a “MassHealth payment system that has not kept pace with the cost of nursing facility care over the last decade” as the root of the state’s nursing home crisis.

Lavallee cited the closing of 32 state nursing homes since 2018 amid persistently low Medicaid rates, according to the report. His organization, in conjunction with the advisory firm CLA, issued a separate analysis last November showing that 95 more facilities, or about a quarter of those still operating in the Bay State, were at risk of closure.

Even a recently won boost of $50 million in the 2020 budget doesn’t make a dent in the $300 million shortfall facing Bay State operators, the coalition told the news service.

“[SNFs] are going to need to be here in the future,” Massachusetts Senior Coalition organizer Frank Romano told SNN last year. “And there’s got to be a reasonable level of funding for labor costs.”

Massachusetts frequently ranks among the states with the most difficult operating landscapes for nursing home operators, with a December 2019 report showing a median operating margin of -3.2% — which fell as low as -10.2% for the bottom 25th percentile of properties.

The legislature itself could act on a bill that would have the same effect as the ballot question, which the report indicated had broad support from Massachusetts residents.

A Beacon Research poll found that 76% of voters are in favor of the petition to change Medicaid funding, based on a sample of 1,277 individuals, the report noted; after learning the pros and cons of the arguments, 72% continued to advocate for the changes, the State House News Service reported.

In addition, “supporter after supporter” testified in favor of the bill Tuesday, according to the report.

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