September 12, 2017

State's nursing homes are underfunded, industry says

Nursing home administrators and staff sounded the alarm on Monday, telling lawmakers their industry is underfunded and needs help.

"There has never been more urgency in the need to stabilize the commonwealth's nursing facilities," Matt Salmon, the CEO of Salmon Health and Retirement and vice chairman of the Massachusetts Senior Care Association board, said at a Joint Committee on Elder Affairs hearing. "We're facing an unprecedented financial crisis that is threatening the quality of care that we provide. This rapid decline has pushed many high-quality nursing homes to the verge of bankruptcy and possible closure."

Salmon and other nursing home heads testified in support of a bill (S 336, H 2072) filed by Sen. Harriette Chandler and Rep. Thomas Golden that would increase the MassHealth reimbursement rates for nursing homes and fund leadership training and scholarship programs for nursing home staff.

Three-quarters of the state's nursing homes have a combined negative margin of 4.4 percent, a statistic that shows a sector "on the brink of collapse," Salmon said.

Chandler said two thirds of the state's nursing home residents, or around 30,000 people, have their care paid for by MassHealth, which reimburses the facilities at a rate that is based on 2007 figures and clocks in about $37 below the cost of care per day. That gap translates to an average annual loss of $900,000 per facility, or $350 million across all providers.

"One of the factors that we have to consider is those more than 400 nursing homes that we currently have, some of them are living from month to month," Chandler, a Worcester Democrat, told the committee. "They are marginal, and in some of the communities...they can't afford to lose any nursing homes because the next nearest nursing home may be miles away, miles away in some of these communities, and that is very difficult for a family who has a loved one in a nursing home and wants to be there for that family member."

Alan Pinshaw, whose daughter Sarah has been a resident at New England Pediatric Care for over 25 years, said stable staffing is crucial to the quality of life in nursing facilities. He called the gap between costs and reimbursement "unsustainable."

"I would like on my way home to drop in at McDonald's, and offer to pay them 2007-dollar prices for a 2017-dollar hamburger and see how far that gets," he said.

New England Pediatric Care Executive Director Ellen O'Gorman said she has been an administrator at the nonprofit facility for 25 years, and last year was the first time she finished in the red, with "parentheses around my ending budget," indicating a negative number.

"There was even a few digits before the comma inside those parentheses, and it's exactly what I'm going to be doing this year, too," O'Gorman said. "It's scary. It's very, very scary. I can't give raises. I can't give salary adjustments."

The push for more state funding for nursing homes comes amid slow-growing tax collections and as lawmakers and Gov. Charlie Baker are looking to rein in escalating MassHealth spending. The state Medicaid program is the largest spending area in the state budget, crowding out other priorities.

Nancy Mahan, a Malden resident whose partner, Margaret, has advanced multiple sclerosis and lives at The Boston Home in Dorchester, said she understands the need for care around MassHealth spending and the importance of investing in home care, which is often less costly than nursing homes.

"At the same time, without really good, quality services, bad care may cost as much money," she said. "It doesn't save us money. Good care saves a lot of emergency room visits, a lot of [intensive care unit] admissions."

Sen. Barbara L'Italien, who co-chairs the Elder Affairs Committee, said lawmakers should look beyond MassHealth funding alone to address the issues raised at the hearing. The Andover Democrat said investments in higher education and workforce development would be needed to shore up the nursing home workforce.

"It seems like there's a number of buckets in which we need to look at this issue," she said.

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