LeadingAge NY releases statement supporting nursing homes
For Immediate Release:
JANUARY 4, 2023
NEW YORK’S HEALTH CARE SYSTEM ERODING DUE TO MASSIVE INCREASES IN
NURSING HOME COSTS AND INADEQUATE MEDICAID REIMBURSEMENT
Governor Hochul Urged to Take Immediate Action in 2023-24 Executive Budget to
Counter the Mounting Crisis
New York’s non-profit and public nursing homes are now in crisis and LeadingAge New York and its members are urging Governor Hochul to provide a 20 percent increase to the nursing home Medicaid rate in the 2023-24 Executive Budget Proposal. It has been 15 years since New York’s nursing home Medicaid rates have been updated to reflect current operating costs. Since then, costs of operating have risen by 42 percent according to the Consumer Price Index for Urban Consumers (CPI-U), the benchmark which would have governed annual Medicaid inflation adjustments had they not been eliminated 15 years ago.
“A 20 percent increase to the nursing home Medicaid rate represents less than half of the actual increase in costs since the rates were last updated in 2007. While it will not make providers whole, a meaningful investment in the nursing home Medicaid rate is critical to ensuring that homes can raise wages, hire more staff, re-open beds, provide high-quality care and stabilize the larger health care delivery system”, says Jim Clyne, CEO of LeadingAge New York.
Many other states have already answered the call of the times. Pennsylvania’s 2022-23 State Budget provided a 17.5 percent Medicaid rate increase to nursing homes. The 2022 Illinois State Budget contained more than $700 million in Medicaid funding dedicated to the nursing home sector. These investments are expected to remain in place for the coming years, and other states, such as Wisconsin, Washington and Texas, continue to put forth investments aimed at addressing nursing home and workforce challenges. Meanwhile, New York watches from the sidelines with a status-quo Medicaid rate that is now 15 years old.
IMPACTS ON CONSUMERS AND STAFF
Over the last few years, many nursing homes have closed units or limited new admissions due to lack of staff. While New York has coasted on paying a medical bill reflecting costs from more than a decade ago, older adults seeking quality nursing home care today are paying the price in a very real way.
“In the Rochester area between 1,100-1,500 nursing home beds have been off-line for almost a year. This is directly tied to poor Medicaid reimbursement. For example, around 86 percent of St. Ann’s Community residents depend on Medicaid to pay for their care. When Medicaid is the main payer, and those rates are based on costs of 2007, our ability to compete for staff in 2023 is extremely challenged,” says Michael E. McRae President & CEO of St. Ann’s Community.
St. Ann’s Community is a member of the Alliance of Senior Care. “The Alliance” is a consortium of five not-for-profit skilled nursing facilities in Greater Rochester region. Together, Alliance members have a combined 4,440 employees and represent more than a third of all skilled nursing and assisted living beds in the region, with more than 2,000 beds.
McRae explains, “when mission-driven providers are challenged to staff at our desired levels for the residents already in our care, our ability to take on new admissions and discharges from the hospital is limited. The 1,100-1,500 nursing home beds that are out of operation in Rochester are causing a ripple effect throughout the health care system. Older adults in hospitals that are ready to be discharged and hoping to progress their recovery are struggling to find nursing home placement, and other people in the community seeking hospital or emergency room care are experiencing delays as well.”
Another member of The Alliance, Michael S. King, President and CEO of Jewish Home of Rochester, builds upon McRae’s comments. “The impact of New York State’s Medicaid shortfall to the Jewish Home of Rochester has resulted in significant operating losses year over year magnified by unreimbursed COVID sick pay, and wage increases that are necessary to recruit and retain staff. Operating with the same Medicaid rate since 2007 despite the 42 percent rise in costs is unheard of in other states,” says King. “We are known as a high quality, not-for-profit long-term care organization, and New York should not be willing to sacrifice quality of care.”
Non-profit, public, and mission-driven nursing homes, and the people seeking their care, are looking to Governor Hochul for solutions. It is time for New York to pay adequately for the medically complex care and services that nursing homes provide. Paying a Medicaid rate that approaches the cost of providing care in 2023 is integral to enabling higher wages for nurses, aides and other staff and ensuring that non-profits can stay financially viable. A robust investment in the nursing home Medicaid rate in the 2023-24 Executive Budget will ensure high quality care is available for our most vulnerable New Yorkers.
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For more than 60 years, LeadingAge New York has set an advocacy agenda for not-for-profit, and government sponsored nursing homes, senior housing, adult care facilities and retirement communities. Since the onset of the public health emergency in March 2020, LeadingAge New York has been an outspoken voice for long-term care providers, caregivers, and residents.