State Budget Cuts Threaten Local Nursing Homes

State budget cuts, as part of a health care gap-closing package, could mean harsh service reductions at local long-term care facilities and nursing homes.

In his 2010-11 state budget proposal, New York governor David Paterson is recommending a health care gap-closing package of $1.9 billion, which would cut long-term care Medicaid revenues by 5 percent or nearly $258 million for the 2010-11 fiscal year.

"After cutting long-term care by over $1 billion in the last three years, to propose sizeable new cuts at this time is a real threat to services for seniors in our community," said Rita Morgan, administrator at the Sarah Neuman Center in Mamaroneck. "We think it's important that our state leaders make it a high priority to protect services for seniors and disabled citizens, rather than cutting them."

One change to the budget that would hit Westchester nursing homes and long-term care facilities particularly hard is the governor's proposed regional pricing system, which he says would reflect the needs of 'harder-to-serve' patients.

"There's a trend factor, which allows for greater reimbursement to some homes," New York State Assemblyman George Latimer said. "But this is a wealthier area so the reimbursement would be lower than, say, upstate New York."

But President of the Continuing Care Leadership Coalition (CCLC) Scott Amrhein is concerned this model will punish homes with good service records.

"One of our biggest concerns for this budget is they are really threatening to destabilize reimbursement by a simple average," Amrhein said. "The consequences would be people who invest in high quality staffing would see bigger cuts and homes with poorer quality care would reap windfalls."

New York state nursing homes currently depend on Medicaid for 80 to 90 percent reimbursement. In 2004 nursing home operating margins were at -2 percent, but the most recent cuts to Medicaid have already pushed the projected loss for 2009 to -11 percent.

"Its arbitrary so they're not saying 'OK, we're going to remove some of the cost burdens you have to suffer,'" Mark Zwerger, CEO of The Osborn retirement community in Rye, said. "We're just going to reduce the amount we're going to pay for you to pay for elders, and it's not a good way to approach reducing the cost of healthcare."

In addition to cutting funds, the state has also been closing approximately one home every two months. Just as homes may have to reduce their staffs, they also are taking in more patients.

"I had a budget hearing last Thursday at the Osborn," Latimer said. "They said these cuts are bad and they need to be reversed, otherwise they're going to have to lay people off, and they're going to have to cut services."

Amrhein said another problem are new taxes on nursing homes and care providers. These taxes would reduce revenues at nursing homes by 1 percent or $87 million and by .35 percent or $20 million for homecare providers.

"This is a case where many of the people who will be most affected are very frail and very disabled," Amrhein said. "Many can't personally make the trip to Albany to testify at hearings. They are extremely vulnerable and extremely dependent on others to advocate on their behalf."