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Medicare Cuts Pose Disproportionate Threat to Idaho's Rural Seniors, Local Jobs Base
Date:11/16/2007

marginally higher unemployment."

Rural Impact of Medicare Cuts Compounded by Medicaid Rates That Fail to Cover Facility Care Costs

A study released in October 2007 from BDO Seidman/Eljay shows that skilled nursing facilities receive an average of $13.15 less than the cost of care for every day of care provided to a Medicaid patient - resulting in a facility operating loss of $4.4 billion nationwide. Since 1999, the funding gap has grown by 45 percent. As a result, Medicare has provided a funding safety net increasingly essential to preserving access to quality care. The disproportionate negative impact on rural seniors if Medicare cuts are enacted would be exacerbated by the ongoing Medicaid underfunding phenomenon.

In further explaining the role of Medicare in subsidizing Medicaid shortfalls, Joseph Lubarsky, the BDO Seidman/Eljay study author said, "Medicare continues to play an important role in the cross-subsidization of Medicaid deficits... un-reimbursed Medicaid allowable costs are projected to exceed $4.4 billion, and providers must continue to substantially rely on Medicare prospective payment in an attempt to break even from government funded programs. Any major slowdown in state economies or changes in federal policies or interpretations regarding federal revenue enhancement programs could easily reverse the positive trends of the past few years." (To view entire BDO Seidman/Eljay Medicaid Underfunding study, go to http://www.ahca.org).

Rural data methodology note: The data used to compute the rural impact data was analyzed and compiled by the American Health Care Association's (AHCA) Reimbursement and Research Department using CBO data from Preliminary CBO Estimate of the Effects on Direct Spending and Revenues of H.R. 3162; the Children's Health and Medicare Protection Act of 2007 as of July 25, 2007; and Medicare day distribution data from CMS Skilled Nursing Facility 100% claims
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SOURCE American Health Care Association
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