The American Recovery and Reinvestment Act of 2009 signed by President Obama February 17, includes key provisions that had been sought and strongly supported by the nursing home and long-term care industry to help improve funding and ease other long-standing problems and concerns.
The American Health Care Association (AHCA), the National Center for Assisted Living (NCAL), and the Alliance for Quality Nursing Home Care (Alliance) worked throughout the process to be sure the massive bills in both the House and Senate, and then the final compromise conference agreement, would contain provisions they argued would contribute to jobs in the industry and help improve the long-term economy. As approved, these key provisions sought by the industry and contained in the new law will:
Increase Medicaid's Federal Medical Assistance Percentage (FMAP) funding to the states by $87 billion
Extend federal prompt payment rules to long-term care providers
Provide $19 billion in funding for health information technology (HIT) grants and loans
Provide $500 million to train nurses and other primary healthcare providers
Delay by one year requirements for 3% withholding on government contractors
Delay until the end of June six Medicaid rules the industry contends would undermine funding to nursing homes. The moratorium is designed to allow time for Congress and the administration to reach a more permanent solution
Bruce Yarwood, president and CEO of AHCA/NCAL, said the additional Medicaid funding “is a cornerstone in terms of protecting seniors' ongoing care needs as our states cope with the severe economic downturn and the associated budgetary turmoil.
“With proper state spending safeguards to help ensure these new federal funds are actually directed toward seniors' care, the FMAP increase will go a long way toward ensuring seniors retain access to quality nursing home care, and protecting and creating the key facility staff jobs that make an enormous difference in patient outcomes,” he said.
The industry was disappointed that an amendment proposed by Sen. Charles Grassley (R-Iowa) that had been included in the Senate bill was not included in the conference report. That provision would have prevented FMAP funds from being diverted to other purposes.
“We strongly urge state lawmakers to ensure the spirit and intent of the federal stimulus legislation is followed-and that protecting and creating new jobs in our frontline workforce, for the benefit of our neediest seniors, is indeed accomplished,” said Alan G. Rosenbloom, president and CEO of the Alliance.
In a February 2 letter to Senate Majority Leader Harry Reid (D-Nev.), Yarwood pointed out that long-term care facilities directly employ 2.9 million individuals and indirectly contribute to the employment of another 1.49 million.
“In a sector where 70% of our costs are labor-related, any Medicaid funding provided in this economic recovery package is quickly translated into hiring and training new staff and retaining existing staff,” he said, adding that more than 100,000 vacant positions are currently waiting to be filled. “But we also need the Congress to provide the necessary funds for the training of nurses and other frontline providers,” Yarwood said. “Moreover, we have many shovel-ready projects for the new construction of nursing homes and assisted living. In partnership with Congress, we can make a major contribution to pushing our economy forward.”
As the process in Congress moved forward, the industry kept up the pressure to provide increased Medicaid funding. “We know that increasing FMAP can work,” said David Kyllo, NCAL executive director, pointing out that in 2003, boosting federal matching funds preserved seniors' access to key Medicaid benefits and services. “Today, we are calling on congressional leaders to preserve eligibility, protect current benefits, and ensure prompt payments for healthcare providers caring for these vulnerable citizens.”
Yarwood and Rosenbloom argued that it makes little sense to provide state Medicaid funding on the one hand, only to see care suffer from subsequent cuts to Medicaid-financed care on the other. They pointed out that over the years Medicaid has paid nearly $13 per patient per day less than the actual cost of their care-a practice that resulted in a payment shortfall of $4.2 billion last year.
“In challenging economic times like those today, states squeeze Medicaid still more by narrowing eligibility, shrinking benefit packages, and slashing and substantially delaying payments to providers,” AHCA and the Alliance said in a joint statement in January. They pointed out that Illinois, for example, takes at least six months to pay legitimate and approved nursing facility claims and California recently imposed an eight-week payment freeze on providers.
The final bill includes a Senate provision extending federal prompt payment requirements to nursing facilities (NFs) beginning April 1, 2009. Those claims must now be paid in 90 days. It also included $19 billion to jumpstart efforts to computerize health records to cut costs and reduce medical errors. Skilled nursing facilities (SNFs) and NFs and “other long-term care facilities” will be eligible for funding under the program, including state grants.
The House stimulus bill provided $600 million to address shortages and prepare for universal healthcare by training primary care providers, including doctors, dentists, and nurses, and helping to pay medical school expenses for those who agree to practice in underserved communities through the National Health Service. The final conference report included $500 million for that purpose.