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No real healthcare reform without LTC financing discussion

April 1, 2009
by Bob Gatty
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Organizations representing various sectors of the nursing home and long-term care community have urged Congress to include improvements in long-term care services and support as part of the emerging blueprint for national health reform being spearheaded by President Obama.
Sen. Herb Kohl

Sen. Herb Kohl

Alan G. Rosenbloom

Alan G. Rosenbloom

Many of those initiatives came together in early March at a hearing by the Senate Special Committee on Aging, chaired by Sen. Herb Kohl (D-Wisc.), who said that “Any serious health reform proposal must address long-term care. With America aging at an unprecedented rate, and with the high and rising costs of caring for a loved one, it is crucial that long-term care services are addressed,” Kohl said.

Alan G. Rosenbloom, president of the Alliance for Quality Nursing Home Care (Alliance), said the committee had launched “one of the most significant, consequential policy discussions we will have all year in terms of how we will provide high-quality care and services to U.S. seniors in the years and decades ahead. America cannot be fully successful in achieving health system reform unless long-term care financing is addressed.”

Central to the debate, Rosenbloom said, is recognizing the changing nature and needs of America's elderly patient population. “Increasing numbers of post-hospital patients, coupled with the continued presence of high-acuity chronic care patients, creates both growing challenges and unique opportunities in the context of reform.”

Rosenbloom cited these areas where extensive discussion and analysis is needed:

  • Under the current system, two-thirds of nursing home patients' care needs are financed by Medicaid, but Medicaid substantially underfunds care, forcing Medicare to subsidize those underpayments. “This flawed, untenable approach to long-term care financing must be addressed as part of any overhaul to the healthcare system,” Rosenbloom said.

  • Increased focus on the comparative effectiveness of care settings is essential; with the goal of achieving the most efficient use of healthcare resources by ensuring patients receive care in the lowest cost setting that meets their needs.

  • Heightened focus on consumer preferences is also critical.

Regarding the underfunding issue, four members of the House, two from each party, sent a letter in late February to President Obama urging the administration to protect seniors' Medicaid and Medicare funding as the fiscal year (FY) 2010 budget process unfolds. The letter was signed by Reps. Earl Pomeroy (D-S.Dak.), Shelly Berkley (D-Nev.), Shelley Moore Capito (R-W.Va.), and Ginny Brown-Waite (R-Fla.).

“The funding shortfall has been calculated at $4.2 billion nationwide in 2008, or to put it another way, a loss of $12.48 per patient, per day,” the letter said. “Medicare reimbursement supplements this perpetual underfunding and until the Medicaid shortfall can be addressed, we ask that you consider the interdependence of these programs when finalizing your FY 2010 budget proposal.”

The problem for the industry has been that while Medicaid funding is less than is needed to cover the cost of serving Medicaid nursing home patients, Medicare funding has not been increased to make up the difference. Further, the Centers for Medicare & Medicaid Services (CMS) has refused to link the two and provide increased funding from Medicare.

In a joint statement, the Alliance, the American Health Care Association (AHCA), and the National Center for Assisted Living (NCAL) urged the administration to consider a long-term care financing reform plan being advanced by AHCA and the Alliance. It includes:

  • A streamlined long-term care system enhancing consumer choice, designed to infuse private resources into the spectrum of long-term care services, ensure a viable care system for the future that covers care provided at home and in a full array of care settings, optimize choice in the type and site of care received, and federalize the system to minimize state-by-state and regional differences in benefits available to all Americans.

  • New financial products to help fund long-term care costs, including federally endorsed long-term care insurance products and new long-term care savings accounts. Incentives would be provided to encourage consumers to purchase these accounts.

  • A new Medicare post-acute payment system featuring updated patient assessment tools, to be implemented by CMS based on the condition, needs, and characteristics of the patient, regardless of where care is provided, thus encouraging consumer choice. The new Medicare payment model and patient assessment would replace the current system for which each site of care has its own reimbursement system determined by varying types of patient classifications.

Fairness Act reintroduced

Meanwhile, on the same day as the Aging Committee hearing, Kohl and Sen. Mel Martinez (R-Fla.) reintroduced the Fairness in Nursing Home Arbitration Act, which they say would protect nursing home residents from losing the right to hold long-term care facilities accountable in court for negligent or abusive care. A version of the bill was approved by the Senate Judiciary Committee last year.