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National, State Front Line Caregivers Warn About $64 Million Cut to Medicare Funding for Care of Michigan Seniors
Date:3/27/2008

Proposed Bush FY 2009 Budget Slashes Nursing Home Funding for Care of Michigan's Most Vulnerable Seniors; Federal Medicare Cuts Place Greater Pressure on State Medicaid Program as Economy Slows

LANSING, Mich., March 27 /PRNewswire-USNewswire/ -- National and state front line caregivers voiced opposition today to $64 million cuts to Medicare-financed nursing home care for Michigan seniors contained in the Bush Administration's FY 2009 budget, and warned that these proposed cuts, combined with growing pressure on the state budget caused by the economic downturn, will severely compromise caregivers' ability to meet the growing complex care needs of Michigan's oldest, most vulnerable seniors.

"From the standpoint of Michigan's oldest, most vulnerable seniors and the direct care workers who serve them, the Bush Administration's Medicare cuts are dangerous to every aspect of front line care giving," stated Lisa Cantrell, a co-founder of the National Association of Health Care Assistants (NAHCA), and a national spokesperson for the Coalition to Protect Senior Care, a coalition of over a dozen front line caregiver groups based in Joplin, MO. "As we successfully opposed efforts in 2007 to cut Medicare funding for long term care, we will fight any attempt by the Bush Administration to slash the vital resources necessary to ensuring Michigan seniors continue to receive the quality care and services they absolutely require."

The Bush Administration's FY 2009 budget -- which includes both legislative and regulatory components -- creates a direct and immediate threat to the long term care needs of Michigan's oldest, most vulnerable constituents -- as well as to the jobs of the key facility nursing staff that make a difference in care quality and patient outcomes. The President's proposal includes elimination of a regularly-scheduled inflation adjustment for skilled nursing facilities (SNFs) -- a measure that requires Congressional action -- and a reduction in overall payments through regulation, a measure that does not require Congressional action.

According to a recently-released analysis from the American Health Care Association (AHCA) based in Washington, DC, the Bush Administration's FY 2009 budget would reduce Medicare-financed nursing home care by $1.71 billion in the year ahead on a national basis, and by $64.1 million for Michigan. On a comparative state by state basis, the AHCA analysis shows the following:

Rank State Total Reduction (Millions)

#1 California $142.60

#2 Florida $138.20

#3 New York $113.20

#4 Texas $104.90

#5 Ohio $100.60

#6 Illinois $95.20

#7 Pennsylvania $80.70

#8 New Jersey $77.50

#9 Michigan $64.10

#10 Indiana $54.20

U.S. Total $1,710.00

Source: AHCA Reimbursement and Research Department using Office of Management & Budget (OMB) data from Bush Administration's FY 2009 Budget & Centers for Medicare & Medicaid Services (CMS) 2006 Skilled Nursing Facility standard analytic file 100% claims data.

"Congress must be prudent and pragmatic in its decisions on Medicare policy, and cutting Medicare funds at a time when Michigan long term care providers are making consistent quality improvements in health care services is insupportable," said Jon Reardon, Chairman of the Board of Directors of the Health Care Association of Michigan. "Adequate Medicare funding for long term care is essential for Michigan providers not only to maintain the level of services they currently provide but also to prepare for the influx of baby boomers requiring skilled nursing and rehabilitative healthcare."

Christine Baker, a front line caregiver at Lutheran Home of Livonia, said the combined impact of federal Medicare cuts and more problematic state economic conditions creates a growing squeeze on facility budgets and seniors' growing care needs. "In providing quality, 24-hour care and services to seniors, nursing homes like those we work in rely upon an annual Medicare cost of living update to meet rising costs -- a full 70 percent of which are related to staffing," she stated. "This crucial Medicare update allows for annual cost of living increases for staff, increases a facility's ability to enhance staffing, and provides the vital resources needed to improve and refurbish the facility with modern equipment and technology. Since approximately 80 percent of nursing home residents rely on federal funding from Medicare and Medicaid, added to a slowing national economy, we worry how these cuts will impact Michigan's and other state's Medicaid programs."

The Coalition to Protect Senior Care consists of the American Association for Long Term Care Nursing (AALTCN); the American College of Health Care Administrators (ACHCA); the American Association of Nurse Assessment Coordinators (AANAC); the National Rural Health Association (NRHA); the American Association of Nurse Executives (AANEX); the American Occupational Therapy Association (AOTA); the American Physical Therapy Association (APTA); the American Society of Health Care Administration Executives (ASHCAE); ASHCAE state affiliate members representing Arizona, Arkansas, Colorado, Idaho, Iowa, Kansas, Maine, New Hampshire, New Mexico, New York, North Dakota, Oregon, Texas and Utah; the American Health Care Association (AHCA); the American Health Quality Association (AHQA); the National Association for the Support of Long Term Care (NASL); the National Association of Health Care Assistants (NAHCA); the Alliance for Quality Nursing Home Care; the Coalition of Women in Long Term Care (COWL); and the Senior Clinician Group.

Key Constituencies, Priorities Harmed by Proposed Medicare Cuts:

Rural Seniors - In rural areas, nursing homes can be tens or even hundreds of miles from one another, and when Medicare funding is slashed, rural facilities' ability to hire, train, and retain key direct care staff is severely compromised. Consequently, rural seniors' ability to maintain access to quality nursing home care is negatively impacted.

Rural Jobs/Rural Economy - In rural communities, nursing homes are often the largest local employer. Our rural communities depend upon the strength and vitality of local long term care facilities for jobs and economic development. The negative ramifications resulting from federal Medicare cuts quickly ripple through the local economic base, whether from lower salaries, reduced benefits, layoffs, or reduced job creation.

Direct Care Workers - Salary and benefits represent as much as 70% of a nursing home's operating costs. When faced with reduced Medicare payments, facilities have little choice but to pass those reductions along to workers, which in turn impacts retention rates and ultimately quality of care. Direct care workers are overwhelmingly women (86%) and disproportionately minorities (30%).

Capital Investment - Nursing homes operate on razor thin margins, the lowest of any health care provider group. Absent stable Medicare payments, facilities lack the resources needed to invest in repairing and improving their physical plants, which often are more than 30 years old. In addition, facilities lack the resources necessary to invest in the health information technology so crucial to improving the quality and cost-effectiveness of health care delivery in the future.


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SOURCE Coalition to Protect Senior Care
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