Capitol Correspondence - 12.17.19

Big Picture: Skilled Nursing Providers Relying More on Medicaid, Creating Analogy to DSP Workforce Crisis

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The Direct Support Professional (DSP) crisis has been a key source of concern for people with intellectual / developmental disabilities (I/DD) and the providers who support them. As such, readers interested in the DSP workforce crisis might be interested in seeing how this issue also affects other Medicaid-funded providers. As reported by McKnights:

“Labor pressures once again showed themselves as a thorn in operators’ side, NIC said. Although Medicaid revenue per patient day hit a time-series high of $214 in September (2.4% year-over-year growth), it “still trails nursing home wage growth by a wide margin,” report authors noted.

Findings could be a predictor of “profound” change in the future, NIC chief economist Beth Mace said.

‘Medicaid is continuing to apply pressure to state budgets, because reimbursement rates are not keeping up with rising labor and other operating costs,’ Mace said. ‘This is not just a rural state issue. Continued growth in Medicaid may also be contributing to financial and budgetary pressures for bigger states like New York and Massachusetts.’

Medicaid revenue mix climbed to 51.5% in the third quarter, an all-time high since NIC started tracking these stats in 2012. That figure is up 55 basis points over the previous quarter and 25 basis points year-over-year. 

‘Medicaid has been the bulk of nursing home census for some time now, but the daily reimbursement rates are often not even enough to cover operator cost,’ acknowledged Jennifer Leatherbarrow, manager of Clinical Consulting Services for Richter LTPAC Performance Advisors.

‘This will make it increasingly difficult for facilities to even break even If the Medicare A census continues to dwindle,’ she added. ‘This could lead to more facility closures and, ultimately, displaced residents.’

Fee-for-service Medicare, which pays providers at the highest rate, hit an all-time low of 10.9% of patient days in the third quarter, as average length of stay continued to creep lower, according to NIC.”