New Avalere Finding: 40 States have either cut or frozen Skilled Nursing Facility (SNF) Medicaid Payments from 2009-2011

February 4, 2012--Representing the most comprehensive publicly available multi-year evaluation of state Medicaid Skilled Nursing Facility (SNF) payment rates, a new Avalere survey finding 40 states have either cut or frozen seniors' Medicaid-financed nursing home care between 2009 and 2011 underscores the challenges facing the sector, and illustrates the importance of ensuring stability in federal nursing home rates.

"We found that almost half of all states reduced Medicaid nursing facility payment rates, and another 17 froze rates," stated Emil Parker, lead author of the Avalere study.

"These findings speak to the financial pressures nursing facilities face on the Medicaid front.  In fact, while the general perception is that the state fiscal picture is improving, the number of states reducing nursing facility Medicaid rates rose from seven in fiscal year 2010 to 16 in fiscal year 2012."

The 50-state survey codifies reductions and freezes in Medicaid nursing facility payment rates (which are set at the state level) from 2009 to 2011.  

Specifically, Avalere found that almost half of all states (23) reduced nursing facility payment rates during at least one of those three fiscal years (state fiscal years 2010, 2011 and 2012), and another 17 froze rates during at least one (and often more than one) of those years.

"The Avalere data adds important context in helping to objectively assess the true level of instability facing the SNF sector as crucial budgetary and regulatory decisions are pending action," stated Alan G. Rosenbloom, President of the Alliance. Rosenbloom also pointed out that due to legislative and regulatory changes over the last five years, SNFs would absorb $127 billion in Medicare reductions over the FY 2012-21 budget window.

Additionally, he said, a recent national Avalere survey of SNFs finds regulatory changes made by the Centers for Medicare and Medicaid Services (CMS) implemented October 1, 2011, are projected to result in the loss of 20,000-25,000 SNF jobs, and could result in another 20,000-25,000 jobs not being created due to cancelled facility expansions and renovations.

In Ohio, more than 3,000 facility jobs have already been lost, according to media accounts.

"Federal policy makers cannot ignore the deteriorating Medicaid situation when determining Medicare rates," Rosenbloom continued. "Medicare and Medicaid populations overlap in the SNF setting, and skilled nursing facilities budget based on their revenues from all payers. Profit margins for skilled nursing remain the lowest of any healthcare sector, and we urge Congress to sustain Medicare rates for the benefit of patients and workforce stability," Rosenbloom concluded.

According to the survey, only 11 states took no adverse action concerning nursing facility Medicaid rates. Sources for the survey included: 1) interviews with state Medicaid agency officials and staff from the state affiliates of the American Health Care Association, a nursing facility membership association; 2) publicly available data; and 3) media accounts.

SOURCE Alliance for Quality Nursing Home Care