North Carolina Nursing Homes Losing $22.6 Million From New Federal Tax Law

RALEIGH, N.C., April 25, 2012 /PRNewswire/ -- As North Carolina lawmakers deal with a fragile state Medicaid funding scenario, a new Avalere Health analysis detailing the negative impact on the nation's Skilled Nursing Facilities (SNFs) resulting from so called "bad debt" provisions passed in the Middle Class Tax Relief and Job Creation Act of 2012 finds North Carolina SNFs (Skilled Nursing Facilities -- more commonly known as nursing homes) will suffer a $22.6 million Medicare funding reduction – the fifth largest cut nationally.

"North Carolina, like many states, has a very fragile Medicaid system with numerous budgetary challenges," said Alan G. Rosenbloom, President of the Alliance for Quality Nursing Home Care (AQNHC), which funded the analysis. "Because Medicare and Medicaid together pay for the care of approximately three of every four North Carolina nursing home patients, it is important for state lawmakers to recognize how these new federal Medicare cuts upset local facilities' already fragile funding environment."

Regarding the new federal tax law and its implication to North Carolina nursing homes, the phrase "bad debt" is a misnomer, Rosenbloom said. "Nursing homes in North Carolina have no legal recourse to collect 'bad debt' from the North Carolina Medicaid agency -- and is more accurately described as 'uncollectible debt' as mandated by federal law," he continued. "We must continue to reinforce this fact with North Carolina's congressional leaders in Washington, and we respectfully encourage state lawmakers to keep this in mind as the budget process progresses."

According to the Avalere Health analysis, the "bad debt" cut for nursing homes in the new tax law found Florida facilities absorbing the largest Medicare reduction ($60.5 million), followed by OH ($30.5 million), IL ($28.8 million), PA ($24.2 million) and NC ($22.6). Additional information and methodology notes available at www.aqnhc.org

Nationally, Rosenbloom said the nation's nursing home sector is already slated to absorb another $48 billion in Medicare reductions between FY 2012-21, and that facilities remain disproportionately reliant on Medicaid as compared to other providers -- with Medicaid paying for 57 percent of patient days.

Contact: Ellen Almond
703/548-0019

SOURCE Alliance for Quality Nursing Home Care

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