Friday, February 23, 2001

Nursing homes fighting to keep funds

Budget cutbacks could bankrupt many, they warn

By Spencer Hunt
Enquirer Columbus Bureau

        COLUMBUS — Ohio's nursing home industry is warning that hundreds of homes would go bankrupt and close if the state takes away $250 million in Medicaid funds.

        Faced with Gov. Bob Taft's proposal to change the way nursing homes are funded, interest groups have begun fighting back in Columbus.

        The dire prediction, contained in written reports from three accountants allied with nursing homes, is now part of an intense budget battle over who will care for Ohio's elderly and how much it will cost.

        “You can count on numerous bankruptcies and hundreds, if not thousands, of seniors being relocated,” said Donald Burkhardt, a Cincinnati accountant who does almost all his work for nursing homes. “This would destroy a part of the industry,” he added.

        Officials at the Department of Job and Family Services say the consequences would not be so severe.

        They point to budget figures that show nursing homes will receive overall funding increases of 4.2 percent and 7.9 percent over each of the next two years.

        “We're attempting to slow the funding growth,” said Barbara Edwards, a deputy director at the agency. “I'm afraid the industry may be trying to scare seniors and their family members.”

        Nursing home funding would increase $286 million over the next two years. That figure would nearly double if the state did not make any changes to the nursing home funding system.

        At the center of the dispute is a growing trend among seniors who prefer alternative state programs that let them live in their own homes with help from Medicaid, the government's medical safety net for low-income families and the elderly.

        Occupancy rates at Ohio's 980 nursing homes have fallen over the past decade, to a point where 13 percent of beds go unused on any given day.

        In that time, the state's alternative in-home care program for seniors, called Passport, has more than tripled in funding and in the number of seniors served.

        “People want to stay in the least-restrictive environment possible,” said Bob Logan, CEO of the Council on Aging of Southwestern Ohio. The council operates the state's Passport program in the Cincinnati region.

        “You still need nursing homes, but it's not the only choice anymore,” he said. “It's probably the choice of last resort.”

        As nursing home attendance drops, Ms. Edwards said, so should funding.

        A department budget plan, endorsed by Mr. Taft, would cut $250 million from projected Medicaid payment increases to nursing homes over the next two years. Part of that plan would change a formula that pays homes based on a daily average of occupied beds.

        The Taft plan would set a higher standard of occupied beds for nursing homes to receive maximum funding.

        That would lead to the death of many nursing homes, predicted Mr. Burkhardt, Edward B. Walsh and Bert P. Cummins. The three accountants gave written opinions on the state's plan on behalf of the Ohio Academy of Nursing Homes.

        Mr. Cummins predicted hundreds of nursing homes would go out of business leaving “thousands of our frail and elderly Ohioans who are residents of Ohio's (nursing homes) with no care.”

        Mr. Burkhardt said nursing homes are so strapped for cash to pay high staff costs, heating bills and state-mandated health services that any change would send hundreds of nursing homes to bankruptcy court. The resulting shutdowns would eliminate up to 10,000 nursing home beds from the state's Medicaid system.

        Those statements are echoed by leaders of interest groups, expected to meet with Ms. Edwards and other agency officials today.

        Roger King, president of the Ohio Academy of Nursing Homes, said home operators need more money, not less. He said many costs do not decrease with the number of residents.

        “Mr. Burkhardt's figures, I think, are accurate,” Mr. King said. “This is a very serious issue for the 75,000 elderly people in Ohio who depend on us for care.”

        While it is reasonable to assume some nursing homes would close, Ms. Edwards said she does not see that happening right away.

        “I can't imagine it,” she said. “In the short term, we're talking about a funding increase.”

        While private talks continue, lawmakers appear content to wait and see whether there are results.

        Sen. Doug White, R-Manchester, chairman of the Senate Finance Committee, urged compromise. His panel must approve any funding changes to nursing homes in Mr. Taft's proposed two-year budget.

        “There's going to be some cuts,” Mr. White said. “How much we try to soften the blow to nursing homes, I don't know.”


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