Saturday, February 12, 2005

Area nursing homes are trying to figure out whether Gov. George Pataki's proposed 2005 budget would help or harm their bottom lines.Nursing home officials fear they will have to cut staff or programs under the smaller reimbursements for Medicaid patients that Pataki has proposed.

Already, Medicaid — which is health insurance for the poor and the main way nursing home residents pay for their care — doesn't cover all of the facilities' costs to care for such patients. This, along with a sicker population, has made it harder for nursing homes everywhere to stay in the black.

"It looks like the governor's proposal is a mixed bag of good and evil," said Jim DeVoe, president and chief executive of Seniorsfirst Communities and Services, which operates the Kirkhaven nursing home. "But a lot of specifics have yet to be identified."

But Kirkhaven got lucky. Preliminary reports show that the Alexander Street nursing home might get a 2.5 percent boost in Medicaid payments — an extra $250,000 yearly — which will help them absorb expected cost increases for items such as salaries and prescription drugs, he said.

Other nursing homes, however, might not be so lucky. Under the proposed budget, Fairport Baptist Homes expects an annual hit of $350,000 and Unity Health's three nursing homes might suffer a yearly loss of $750,000, officials said.

"We'd have to do the obvious: Cut out many, if not all, of our outpatient programs to the elderly, cut salaries, cut staff, cut services," said Warren Hern, Unity's chief financial officer.

Several of the governor's proposal are expected to cost the state's nursing homes $462 million annually, according to the Greater New York Hospital Association, which has teamed with Local 1199 of the Service Employees International Union, the state's largest health care union, to fight the proposal.

Last week, the coalition released a report that said the proposed budget would cause 15 area hospitals to lose a total of $25 million annually. The group plans to release a similar report next week on the area's nursing homes.

At the heart of the move is the governor's plan to cut Medicaid spending, which Pataki has said is critical to keeping the state financially viable. Counties, for example, have asked the state to control such costs because growth in Medicaid spending has forced double-digit tax increases. Monroe County's Medicaid bill has almost doubled over the last decade, to $151 million this year.

But DeVoe said the Medicaid cuts would result in private paying patients forking over more for nursing home care.

Kirkhaven spends $200 a day caring for each patient, he said, although the Medicaid reimbursement rate is $142. To make up for that gap, Kirkhaven charges private pay patients $270 daily.

Pataki's proposals include boosting the tax on nursing homes from 5 percent to 6 percent and doling out Medicaid reimbursements based on the average regional cost to care for patients.

Kirkhaven's average costs might have been below that average, explaining the bump in reimbursement, DeVoe said.

"But some of the unlucky nursing homes are looking at a 2.5 percent or 5 percent reduction," he said. "What are they going to do? Let staff go or do something more dramatic? There are winners and losers in this proposal, and it's unfortunate."

Fairport Baptist officials, for example, are looking at where they can save money if Pataki's proposal becomes reality, said Tom Poelma, chief operating officer.

Unity's nursing homes could face a future yearly loss of $1 million — if you combine its 2004 loss of $300,000 with the estimated $750,000 hit from Pataki's budget, Hern said.

"A $1 million loss is a big amount to any organization," he said. "To nursing homes, where the primary cost is salaries, there are only so many places you can go."