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AHCA/Alliance: New Medicare Regulation Will Hurt Seniors, Cost Jobs, Perpetuate Inefficiency
Date:5/1/2009

Turning Back Clock to Implement Bush Administration Proposal at Odds With Intent of Economic Stimulus, Broader Health Reform Goals

WASHINGTON, May 1 /PRNewswire-USNewswire/ -- Reaching back in time to propose implementing a Medicare regulation first proposed by the Bush Administration to cut seniors' Medicare funding by $1.05 billion in FY 2010 (estimated to be $5.6 billion over five years) is completely at odds with the intent of the American Recovery and Reinvestment Act (ARRA) in terms of creating jobs and spurring economic growth, and will hinder ongoing efforts to modernize Medicare for the benefit of seniors and taxpayers, according to two national long term care leaders.

Last summer, forty Democratic and Republican Senators joined together to actively oppose the rule, and noted in one letter to the Administration that the proposed cuts "will jeopardize the significant quality improvements made by the Skilled Nursing Facility (SNF) community in recent years as well as the ability of SNFs to continue caring for high-acuity patients. Because SNFs rely on Medicare to make up for chronic underfunding by the Medicaid program. We believe that if CMS were to finalize its proposed rule, the ability of providers to care for our nation's most vulnerable population - the frail elderly and disabled - would be severely threatened."

Bruce Yarwood, President and CEO of the American Health Care Association (AHCA), said, "Implementing this old Bush Administration Medicare regulation will undermine seniors' future access to quality care in the setting of their choice, sidetrack our sector's ongoing ability to create good-paying health jobs, and place at risk the delivery system reforms now successfully underway to make this vital program more efficient for patients and more accountable to taxpayers. With Congress and the Obama Administration so effectively focused on job creation in the face of poor national and state economic conditions, this CMS proposal is at fundamental odds with our broader economic and health policy objectives, not complementary to them."

Alan Rosenbloom, President of the Alliance for Quality Nursing Home Care, said the Bush CMS rule, and the damaging impact of its sharp funding cuts, would slow the flow of post-acute patients into the lowest cost setting most appropriate to their care needs. "Backtracking in the manner CMS proposes will undermine the very core principles of the Administration's health policy goals, and is antithetical to the health system delivery reforms America needs and seniors deserve," he said. "As the nature of America's nursing home patient population continues to change and evolve, it should logically be the policy of CMS to help facilitate the ability of nursing homes to care for higher-acuity, post-acute Medicare beneficiaries."

Yarwood and Rosenbloom said one of the many flaws associated with the proposal is that because approximately 70 percent of facility operating costs are directly related to staff, the proposed rule's deep cuts will result in thousands of lost jobs in the very sector well positioned to create them.

This comes at a time when the long term care industry is already facing major challenges due to the economic recession. A recent study of proprietary nursing homes by Dobson DaVanzo & Associates LLC found that "while there may be vacant positions that could be filled, one third of our respondents spoke of having to freeze jobs in their facilities and forgo filling these positions." Wages for current employees were also not increasing as a result of the economy, the study found.

On a health policy level, many Medicare beneficiaries have sought and received quality care in skilled nursing facilities (SNFs) rather than a higher cost setting. Yarwood and Rosenbloom observed that SNFs have invested heavily in recent years to increase capabilities to admit, treat and return to home a growing number of patients requiring intensive rehabilitative care, and care for patients with multiple chronic illnesses. Implementing the proposed funding cuts, the long term care leaders said, would inhibit continued investments in cost effective care - contrary to the Obama Administration's stated health policy objectives.

The AHCA and Alliance leaders also expressed concern the CMS action to cut Medicare-financed nursing home care will be especially damaging to seniors in the many states across the nation who have already endured or soon face substantial Medicaid funding cuts as a result of recent state legislative actions.

"Medicare and Medicaid funding are inextricably linked, and the combination of cuts to both programs squeezes facilities in a manner harmful to Medicare beneficiaries' rising care needs, as well as to our local economy and caregiver jobs base," Yarwood said. "As this is our initial analysis of the CMS rule, and we will continue to evaluate and comment, we urge the Administration and Congress to avoid adopting short-term, budget-driven policies that are inconsistent with the goal of improving post-acute care coordination and payment efficiency," concluded Rosenbloom.


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SOURCE American Health Care Association
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