THCA: Proposed 33 Percent Medicaid Rate Cuts Will Put Texas Seniors' Care, Local Health Jobs in Clear and Present Danger

Draconian Cuts Contained in HB 1, on Top of Ongoing Medicare-Medicaid Funding Squeeze, Puts Dangerous Strain on State's Nursing and Rehab Care

AUSTIN, Texas, Feb. 16, 2011 /PRNewswire-USNewswire/ -- In testimony today before the House Appropriations Subcommittee on Health and Human Services, Tim Graves, President of the Texas Health Care Association (THCA) warned that HB 1 will cut Medicaid-funded nursing and rehab care by $1.4 billion – or 33 percent less than existing funding levels – and will lead to bankruptcies and facility closures; cause widespread displacement of fragile nursing home residents; and send skilled, frontline health care workers to unemployment lines in local communities across Texas.

"This is not hyperbole – I'm alarmed to say these are stone cold facts," testified Graves. "If this 33 percent cut proposal is enacted, Medicaid-financed nursing home care as we know it in Texas will cease to exist – with disastrous implications for rural, suburban and urban seniors alike."

Joined in testimony by Derrick Prince, Vice-Chair of the THCA Board of Directors and President and Chief Operating Officer of Mason Health in Dallas, and Darlene Evans, Chair of THCA's Independent Owners Council and Advocacy Committee and owner/administrator of the Autumn Winds Retirement Lodge in Schertz, the nursing and rehab care advocates explained the dire impact of the proposed Medicaid rate cuts on local nursing facilities, caregivers and their residents.

Graves explained that even before this latest HB 1 budget bombshell, already proposed 2 percent Medicaid rate cuts, on top of last September's $25.6 million state Medicaid cuts, and federal Medicare cuts of over $1.5 billion over ten years enacted as part of health care reform, placed Texas nursing facility residents, their caregivers and local communities in clear and present danger. Further, for more than a decade, Texas nursing facility Medicaid reimbursement rates have not even covered the operating costs of Medicaid-contracted nursing home operators – earning Texas the unenviable rank of 49th lowest in the country in Medicaid reimbursement.

"To provide quality care under a Medicaid system that perennially under-reimburses providers for their costs, Texas nursing facilities long ago turned to the Medicare system as a means to cross-subsidize the deficiencies of the state's Medicaid rate," added Graves. "Recent actions in Washington have now effectively cut off this funding stream as a stopgap solution to state Medicaid underfunding."

Graves pointed out that with eighty to eighty-five percent of Texas nursing home residents dependent upon either Medicare or Medicaid funding, the cumulative impact of reductions – even before the 33% cut proposal – severely limits local facilities' capacity to maintain the quality of care that elderly Texans expect and deserve.

"Rest assured these cuts will severely decrease access to long term care services, particularly nursing home services, and as a consequence will increase the utilization of much higher cost acute care services, including hospital admissions and emergency room visits," said Graves. "There are steep consequences to rate reductions and budget cuts – for patients, for jobs, and indeed our taxpayers."

Graves noted that with the largest portions of provider costs being caregiver salaries and wages, the cuts proposed in HB 1 will force local facilities to significantly cut staffing levels, cut pay – or worse –go out of business, leaving local seniors and local workers to make do with no care and no jobs.

Concluded Graves: "We want to ensure that the lawmakers who ultimately decide the final details of the state budget know without a doubt that HB 1 will displace elderly constituents, cost the jobs of local caregivers, and force the closure of many communities' most significant local employer. Quality care, good local jobs and adequate Medicaid funding from Austin all go hand in hand."

Founded in 1950, the Texas Health Care Association (THCA) is the largest long term care association in Texas. THCA represents a broad spectrum of long term care providers and professionals offering long term, rehabilitative and specialized health care services. Member facilities, owned by both for-profit and non-profit entities, include nursing facilities, specialized rehabilitation facilities, and assisted living facilities.

SOURCE Texas Health Care Association

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