By Bill Zeeble, KERA 90.1 Reporter
Dallas, TX – Bill Zeeble, KERA 90.1 Reporter: Nursing home funding-legislation has come up before every legislature for years in Texas, say those who operate the homes. 1996 was no exception. But that year, after nursing homes said they needed more Medicaid funding from the State just to cover costs, an agreement was reached between the Texas Department of Human Services and nursing home operators. Attorney Dean Davis, who represents the Texas Nursing Home Alliance, says in exchange for his group not suing, the State agreed to reimburse nursing homes more money for their residents. That way, they?d meet federal standards for quality, safety and care.
Dean Davis, attorney representing Texas Nursing Home Alliance: The State of Texas is obligated to keep this agreement just like everybody else is. They have not done so. We?ve got, by some estimates, 40% of the homes in the State of Texas in bankruptcy.
Zeeble: Bill Horabin, who runs a nursing home in Austin that?s a party to the lawsuit, says the agreed-to formula was designed to arrive at a statewide average to keep reimbursements at adequate levels. If costs rose, reimbursements were supposed to. But nursing home operators say the State?s Medicaid funding for residents has dropped from 44th to 47th in the nation. More Texas Medicaid money - matched two-for-one by the federal government - is essential for covering costs of 100,000 Texans, says Horabin. He says Texas now reimburses nursing homes about $84 a resident per day, even though it costs the homes $96, on average, to provide the proper - and legally required - care.
Bill Horabin, director, Stonebridge Health Center, Austin: You cannot deliver a service that costs $96 for $84. If you go into a grocery and you wheel the cart up to the counter, and they say, ?That?ll be $96,? and you say, ?but I only have $84,? what happens?
Zeeble: Horabin says statewide reimbursement averages are a problem too, explaining that nursing home costs in big cities are much higher than in small towns. He says the State does not consider that. A spokesperson for the Texas Department of Human Services says there?s no merit to the lawsuit; that reimbursements have risen every year even as the number of patients has declined; and that the poor funding claims made by nursing home operators are misleading. Steven Lorenzen, who sets Medicaid rates at the Texas Health and Human Services Commission, doesn?t buy Horabin?s argument that low reimbursement rates are bankrupting nursing homes. He blames some of their problems on supply and demand.
Steve Lorenzen, Director of Medicaid Rate Setting, Texas Health and Human Services Commission: Some areas in the state have an oversupply of nursing home beds. Occupancy has been 75-80%, depending on the month. It?s been relatively low. Occupancy in the state is among the lowest in the country. A lot of the cost per day problem is tied to low occupancy. Many facilities are 30% occupied, trying to make a go of it.
Zeeble: Lorenzen also disputes the lawsuit allegation that the State hasn?t upheld its part of the 1997 agreement.
Lorenzen: I don?t want to get into details, ?cause it?s in litigation, but the terms that are referred to is simply that we?d meet and discuss certain issues. Of course we?ve met and discussed many times those issues. The problem is the issues weren?t settled to the satisfaction of the industry. So they say we didn?t live up to our end of the agreement.
Horabin: The State can say all they want to, but no one would settle a federal suit that involved 1200 facilities, 100,000 nursing home residents, and over a billion dollars worth of a state?s budget with an agreement to just talk and walk away. There has not been a result.
Zeeble: Again, nursing home operator Bill Horabin. He also calls Lorenzen?s supply-and-demand explanation demagoguery.
Horabin: First of all, we don?t have a legitimate law of supply and demand in this business because of the moratorium. The State controls who can have beds where. So the occupancy figures are totally distorted.
Zeeble: Reimbursement woes, rising costs - like liability insurance rates - and the lawsuit demanding more Medicaid dollars won?t necessarily assure nursing homes get more money. That?s up to the Legislature. Economist Coyle Kelley, a witness for nursing homes operators, says lawmakers have failed in their role. Coyle Kelley, economist, business consultant and expert witness for Nursing Home Alliance: The Legislature has not stepped up to the bar and accepted responsibility to pay for the services that are necessary to provide good quality care to nursing home Medicaid-eligible residents. But I do think it?s a matter of moving out of denial and getting into position that they realize these are real issues, this is real money and it?s really this big, and some substantial solutions are going to have be come up with.
Zeeble: Senator Mike Moncrief, who chairs the Health and Human Services Committee, says the Legislature is not in denial about the needs and concerns of the state?s elderly on Medicaid, or nursing home operators.
Mike Moncrief, Texas State Senator (District 12) and Chair, Texas Senate Health and Human Services Committee: I have no doubt this is a priority for the Lieutenant Governor and Health and Human Services Committee. I think every member of the Senate is aware this industry is in the ditch. Costs continue to escalate. Rates for insurance continue to climb. Everyone is looking for permanent solutions.
Zeeble: Moncrief says that includes House members too. But he says he has to be honest - there may not be enough money in the budget.
Moncrief: They?re still scrubbing the budget, and it?s possible they might have to go back and scrub the budget again. When I was on Finance last session, we had to make three passes before we finally got the dollars for health and human service agencies.
Zeeble: Legislators say no matter what the budget is, there are always more funding needs than there is money. Senators just recommended an increased Health and Human Services budget this week, up to14 billion dollars. But even with that, there?s still not enough to pay for one of the legislators? key priorities: enrolling, under Medicaid, all the state?s children who are eligible. So legislators doubt they can find 200 million dollars to adequately reimburse nursing homes, even though that?s another of their top priorities this session. For KERA 90.1, I?m Bill Zeeble.