An accounting firm called BDO Seidman and the American Health Care Association analyzed the FY 2007 budget proposal and found that Louisiana would face a $70.2 million cut in Medicaid funding for nursing homes, which would represent the ninth highest reduction of all states analyzed. The cuts would add to the state’s woes in the aftermath of Hurricanes Katrina and Rita.
From the press release:
“At a time when nursing homes throughout the state are dealing with higher costs and government funding that does not come close to paying for the actual cost of providing quality care, the Bush Administration’s plan to reduce key Medicaid funding is bad public policy proposed at an inopportune time,” warned Joe Donchess, executive director of the Louisiana Nursing Home Association (LNHA). “Nursing home labor costs have risen by as much as 80 percent in some areas of the state in the hurricanes’ aftermath, and these new federal Medicaid cuts would further destabilize and undermine many facilities’ ability to hire and retain staff.”
What is the impact on long term care providers? States currently may use up to 6 percent of taxes assessed to nursing home providers to acquire more Medicaid matching funds The assessment would be limited to 3 percent if the budget passes in its current form. In other words, it doesn’t appear that providers will be taxed less; states would be limited in what they could do with a percentage of the taxes.
I’d like to hear from providers who have a better understanding of how this will impact the nursing home care industry.