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AHCA, Alliance Warn Rural Seniors Will Bear Major Brunt of Bush Administration's Medicare Cuts
Date:5/27/2008

Rural Seniors in OH, TX, NC, IL, PA, TN, KY, IN, MO, MI Face Greatest, Most Immediate Threat

WASHINGTON, May 27 /PRNewswire-USNewswire/ -- As Members of Congress are in their home districts this week over the Memorial Day district work period, national and long term care leaders are raising the profile of damaging Medicare cuts proposed by the Bush Administration, and warning that rural seniors' care needs will be most negatively impacted in Ohio, Texas, North Carolina, Illinois, Pennsylvania, Tennessee, Kentucky, Indiana, Missouri, and Michigan. This is according to a new rural impact analysis of the cuts released today by the American Health Care Association (AHCA) and the Alliance for Quality Nursing Home Care.

At issue is the Bush Administration proposed rule that the Centers for Medicare and Medicaid Services (CMS) issued on May 1, 2008, which would cut Medicare skilled nursing facility (SNF) payments to account for a "forecasting error" made by CMS in 2005. In making the "correction," CMS will cut $133.2 million in Medicare Part A funding for rural seniors' skilled nursing care in FY 2009, with a Patient Per Day (PPD) impact of $10.96, according to the new AHCA data.

Bruce Yarwood, President and CEO of AHCA, and Alan G. Rosenbloom, President of the Alliance, warned that in proposing these cuts, CMS has failed to factor-in changes in Administration-backed Medicare policies that, as intended by original policy, are moving significant numbers of high acuity patients into SNFs - patients who otherwise would have been cared for in higher cost settings. These policies saved Medicare $709 million in 2006 alone, according to an independent analysis by Avalere Health, LLC.

Further, the AHCA and Alliance leaders observed, the Medicare cuts will have an especially disastrous impact on rural facilities and their patients, as sharply rising energy and food prices - on top of higher labor costs, the profession's greatest ongoing challenge - pose growing cost and care-access problems. The new AHCA analysis of how the "forecast error" Medicare cut will impact rural facilities and patients' care needs finds the following:

State Rural Cut Rural PPD State Total

(in millions) (patient per day) (in millions)

OH $9.1 $11.79 $45.4

TX $8.2 $10.05 $45.7

NC $7.4 $11.09 $21.8

IL $6.6 $10.94 $42.7

PA $6.6 $11.52 $37.7

TN $6.5 $10.84 $18.8

KY $5.6 $10.84 $13.0

IN $5.3 $11.02 $23.6

MO $5.1 $10.35 $16.6

MI $4.7 $11.24 $27.4

U.S. $133.2 $10.96 $770

"When it comes to America's rural nursing homes and the Medicare beneficiaries dependent upon their care and services, cuts like those soon to be implemented are a looming disaster from the standpoint of negatively affecting facilities' already fragile cost structures, staffing, and ultimately, patient care," warned Yarwood. "At the national and state levels, we will significantly raise the profile of how these Medicare cuts will hurt every Medicare beneficiary - and especially how these illogical, ill-considered cuts will undermine care in rural America."

Rosenbloom added facilities' total Medicare margins remain very low, and that energy, food, and vendor delivery costs - in conjunction with growing pressure on state Medicaid budgets - are squeezing rural facilities in a worrisome manner. "As every American is increasingly concerned about the spike in energy and food prices, we plan on ensuring federal lawmakers are acutely aware how these spiraling costs, in conjunction with the Administration's Medicare cut, will undermine nursing homes on an operational basis, and jeopardize seniors' care needs on a clinical level. On virtually every front, America's skilled nursing facilities are facing budget cuts and cost increases, and it is time to sound the alarm."

Yarwood and Rosenbloom said that in the days ahead, state long term care leaders and the front line caregivers responsible for the care and well being of frail, elderly seniors will detail how the Bush Administration's proposed Medicare cuts will negatively impact seniors in specific states, in specific ways. The profession collectively is urging lawmakers to contact Health and Human Services (HHS) Secretary Mike Leavitt to oppose the regulatory cut within the CMS comment period so that the federal agency must respond. In addition, long term care leaders seek to inform the leadership of the U.S. Senate and House of their concerns about the risks to skilled nursing facilities, and their opposition to any Medicare cuts - including the SNF market basket, which remains threatened.


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SOURCE American Health Care Association
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