Increases state reimbursement for care, treatment, maintenance and nursing services in nursing homes

Summary of provisions

This legislation would add a new paragraph to the Social Services Law, increasing the percentage of Medicaid costs that are reimbursed to certain counties by the State for long term care services. Currently, the federal government pays for fifty percent of the cost of Medicaid Services and local social services districts are reimbursed 81.235% of the remaining costs (non-federal share) of Medicaid eligible long term care services by the State. Under this legislation, counties would be eligible for an enhanced state reimbursement rate if they had a non-state public nursing facility operating within the county for the previous twelve months and that nursing facility had operational losses in that time period. The enhanced rate would be set at an amount that would offset the losses incurred by the facility and would apply to all eligible Medicaid long term care services paid by the county.

Justification

According to an independent study, county operated nursing facilities received substantially less revenue than other nursing facilities because the county operated facilities provided significantly more care to patients that are less profitable because of income/insurance status or because of diagnosis (such as Alzheimer's Disease). Consequently, county government taxpayers are often called upon to subsidize the operation of these facilities when they incur operating losses. Unfortunately, these same taxpayers are required to separately bear the "local share" cost of Medicaid long term care services. This legislation would ensure that these local taxpayers are not required to pay a "double tax" to support appropriate long term care services in their counties. Private sector nursing homes typically target individuals with the ability to "self-pay" for at least a limited period of time or who have some level of private insurance. These individuals relatively quickly "spend-down" the private source of payment and qualify for the Medicaid program. However, the high level of private payments received before qualification for the Medicaid Program often provides the difference between losses and profits. The nursing home industry in New York State has long demonstrated that Medicaid rates do not cover costs that the difference is made up by private payments. Consequently, individuals that are already enrolled in the Medicaid program prior to admission

into a nursing home facility are considered money-losing patients to whom most private sector nursing homes cannot afford to provide services. Because of the commitment of county governments to providing services to this population-- and finances by hundreds of millions of dollars in subsidiaries--county nursing facilities are left to provide care to this population. Most county facilities have a written admission policy often times enacted by the county legislature that requires the county facility to admit individuals already enrolled in the Medicaid program before admitting individuals with the ability to pay through private sources of funding. Without the county facilities, individuals already enrolled in Medicaid would face significant difficulties in accessing nursing facility services in a timely manner. This is particularly true of individuals already enrolled in Medicaid that lack social supports and/or regular and appropriate medical care and consequently have more medical and social complications with their primary diagnosis or disability. Additionally, county facilities are more likely to provide services to other individuals that are not eligible for desirable levels of reimbursement. In the cost-based system in place from Medicaid nursing facility reimbursement prior to 1986, it has been documented that county facilities provided care to patients with the highest case mix intensity because other sectors could not afford to be burdened with these costly cases. In 1986, New York state instituted a case-payment methodology for Medicaid nursing facility reimbursement that rewarded nursing facilities for taking more medically involved, complex cases. However, that resulted in access problems for many individuals with low medical intensity, but additional non-medical needs. For example, New York State has had problems with access to nursing homes for Patients with Alzheimer's Disease- the combination of low-medical intensity and high staff costs associated with monitoring result in a reimbursement/cost imbalance. County facilities now are the provider of last resort for these individuals reimbursed as "low intensity" but actual higher costs of care.

Legislative history

S.1051 of 2009/2010; Referred to Health S.46 of 2007/2008; Referred to Senate Social Services, Children and Family Committee S.1164A of 2005/2006; Referred to Senate Social Services Committee S.5854 of 2004; Referred to Senate Social Services Committee

Fiscal implications

Operational losses incurred by county operated nursing facilities over the past several years range from periods where the statewide average was over $40 million in annual losses a year to years where there were no losses.

Effective date

This act shall take effect April 1, 2013.