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New president, new LTC challenges

December 1, 2008
by Bob Gatty
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With President-elect Barack Obama ready to assume power next month and Democrats significantly increasing their majority in both the House and Senate, operators of skilled nursing facilities can expect initiatives in Washington that could well pose challenges in the year ahead.

“Stark congratulates president-elect Obama; urges focus on health care,” read a press release from Rep. Pete Stark (D-Calif.) within minutes of Obama's landslide November 4 victory. The chairman of the House Ways and Means Health Subcommittee, Stark is prime sponsor of the Nursing Home Transparency and Quality of Care Improvement Act of 2008, which contains many provisions that trouble nursing home industry interests (see View on Washington, p. 14, November 2008).

But that's just the beginning of what may lie ahead in the lllth Congress, in which House and Senate margins held by Democrats were significantly increased in the election that swept Obama into the White House.

First, even before that happens, the lame-duck 110th Congress will consider a new stimulus plan and Democratic leaders plan to finalize it by year's end, offering an opportunity for nursing home interests to pursue one of their top priorities. Immediately after House Speaker Nancy Pelosi (D-Calif.) announced her intentions in mid-October to move such an initiative, the American Health Care Association (AHCA) urged that state Medicaid relief be included.

“With state budgets across the nation under rising pressure, federal relief is essential to protecting care, preserving key staff and promoting quality,” said Bruce Yarwood, AHCA president and CEO. A week later, AHCA released a new study by Eljay, LLC projecting that Medicaid this year will underfund the actual cost of providing quality long-term care by $4.2 billion.

“Given the substantial gap between the cost to provide quality care and what Medicaid actually pays and the steeply rising pressure on state budgets, long-term care providers and the seniors they care for have good reason to be fearful that imminent state budget cuts could threaten access to care,” Yarwood warned. “A post-election economic stimulus package must include state Medicaid relief to help prevent problems with accessing this essential care in 2009.”

According to the Eljay, LLC, analysis, the states with the greatest funding shortfalls for nursing facility care are:

New York

$548.1 million


$379.3 million


$281.3 million

Pennsylvania $261.2 million

New Jersey

$241.9 million


$235.0 million


$203.6 million


$200.0 million


$197.0 million


$188.5 million

On Oct. 31, AHCA and the National Center for Assisted Living (NCAL) praised the National Governor's Association for urging Congress to increase for at least a two-year period a formula that determines matching payments to state Medicaid programs. Whether Congress will listen was unclear, but Yarwood said he was encouraged by Federal Reserve Chairman Ben Bernanke's comments before the House Budget Committee suggesting that using federal funds to boost state services would help the economy.

Urgent reminder

The pressure for increased funding for Medicaid came as the Centers for Medicare & Medicaid Services (CMS) issued a new report projecting that Medicaid benefits spending will increase 7.3% from 2007 to 2008, reaching $339 billion, and will grow at an annual average rate of 7.9% over the next decade, reaching $674 billion by 2017. That compares to a projected rate of growth of 4.8% for the general economy, CMS said.

“This report should serve as an urgent reminder that the current path of Medicaid spending is unsustainable for both federal and state governments,” declared Health and Human Services Secretary Mike Leavitt. “We must act quickly to keep state Medicaid programs fiscally sound. If nothing is done to rein in these costs, access to healthcare for the nation's most vulnerable citizens could be threatened.”

Looking forward, at least two labor-related measures are expected to gain traction in the new Congress with the support of the Obama administration:

  • The Employee Free Choice Act, sponsored by Sen. Edward M. Kennedy (D-Mass.), and Reps. George Miller (D-Calif.) and Peter King (R-N.Y.), would require the National Labor Relations Board to certify a union bargaining representative without a secret ballot if a majority of employees designate a representative by checking a card—if the employees are not represented by any other labor organization. The bill passed the House last year, but died in the Senate because of a Republicanled filibuster. President Bush had threatened a veto of the measure, opposed by AHCA/NCAL. However, indications are that it will be given priority in the new Congress and be signed by the new president.

  • The Re-Empowerment of Skilled and Professional Employees and Construction Tradeworkers Act of 2007 (RESPECT), sponsored by Sen. Christopher Dodd (D-Conn.) and Rep. Robert E. Andrews (D-N.J.). The bill changes the definition of “supervisor” under the National Labor Relations Act and would result in many registered nurses being allowed to be part of a collective bargaining unit. AHCA/NCAL opposes the bill.