Stagnant Medicaid rates hurting nursing homes
As residents of the Capital Region begin the new year with hopes for good health, happiness, and prosperity, one vital segment of our community is being left behind — our senior citizens in need of long-term care. Regrettably, 2023 marks 15 years since New York state last accounted for inflation and raised the daily Medicaid rate paid to nursing homes.
During that time, inflationary costs have risen 42 percent. Imagine trying to operate your home on the same income that you made in 2008.
In most of New York’s nonprofit nursing homes, Medicaid is the primary funding source for between 60 percent and 75 percent of the annual budget. Yet it only covers a percentage of the actual costs of care: At Daughters of Sarah Community for Seniors, it covers 55 percent of the actual cost; and at Wesley Health Care Center, just 68 percent.
With every Medicaid resident cared for, Daughters of Sarah loses $147 per day, and Wesley loses $106. Annually, these losses total $5,900,000 and $8,500,000, respectively.
During the pandemic, 26 states increased their Medicaid funding, while 23 others maintained funding at current levels. Only New York distinguished itself by reducing its reimbursement rates.
Prior to COVID, we were able to break even in some years through alternative revenue streams and philanthropic support. That is no longer the case.
The result is that nursing homes — and our beloved senior citizens residing here — are bearing the burden of the increased costs. Due to this daily payment shortfall, community-focused, nonprofit nursing homes are closing or being sold to private “for-profit” operators at an alarming rate.
New York’s chronic underfunding of the Medicaid rate for nursing homes has also exacer
bated the staffing crisis impacting the health care industry. By not receiving adequate funding that other health care components receive, we are unable to compete for a quality workforce. This has forced many nursing homes, including ours, to close beds or limit admissions. Throughout New York, 6,700 beds are “offline” for this reason.
New York’s lack of support also impacts our hospital systems. Without available beds, hospitals cannot discharge patients who would have traditionally gone to a nursing home for rehabilitation. This backs up emergency rooms and limits available beds for hospital inpatient care.
Nonprofit nursing homes across the state are asking for a 20 percent increase in the nursing home Medicaid reimbursement rate — an investment representing less than half of the increase in costs that we have absorbed over the past 15 years. While the governor’s recently released budget proposed a 5 percent increase, that falls woefully short of what is needed to correct 15 years of New York neglecting our residents.
We are fully committed to our respective missions and have been for decades. However, it will take appropriate funding from New York state for our organizations to continue successfully. Now is the time for our elected officials to show their support for our seniors who need help today, and for those of us who will need help in the future.