By Ted Nesi
PBN Web Editor
PROVIDENCE – The association that represents Rhode Island’s nursing homes is lashing out at a proposal by the Obama administration to reduce the amount of money they receive from the federal Medicare program.
In February, President Barack Obama told Congress his administration would “root out the waste, fraud and abuse in our Medicare program that doesn’t make our seniors any healthier.” The administration is seeking savings across the federal budget to help pay for its hallmark initiatives, most notably health care reform.
The White House’s draft budget for the 2010 fiscal year, which starts Oct. 1, calls for a $1.05 billion reduction in Medicare spending on nursing homes, according to the American Health Care Association, a trade group.
The Centers for Medicare & Medicaid Services argues most of the cuts will be offset by an increase in reimbursements elsewhere, and also says providers received a windfall after a 2006 adjustment led to higher-than-forecast payments, according to McKnight’s, a trade publication.
The Rhode Island Health Care Association, which represents nursing and rehabilitation facilities in the state, said today the proposed cuts would drain more than $9 million from the Rhode Island economy, with $6.19 million less in business activity and $3.18 million less in personal income due to the loss of 94 jobs.
“If put into effect, the Medicare cutback will not only slow the creation of new jobs in one of the few sectors showing job growth in Rhode Island, it also would make it much harder for skilled nursing facilities to deliver the kind of long-term reductions in costs that are so crucial to effective health care reform,” Virginia Burke, the association’s president, said in a statement.
The White House also wants to switch to a system of “bundled” payments, in which hospitals, nursing homes and other facilities would receive a lump sum to cover all treatment costs, regardless of how many times a patient is readmitted.
Burke said nursing facilities save Medicare money by providing short-term care to patients recuperating after a hospital visit, but the cuts would end that. “This is bad policy, pure and simple – and needs to be overturned,” she said.
The association also noted that the long-term care industry is already dealing with a reduction in Rhode Island’s Medicaid program, which the group said covers two-thirds of nursing home population.
“If these cuts happen in tandem, it will have a real and painful effect on the elders who live in nursing homes, as well as those who care for them,” Burke said.