Thirty-seven dollars per day per person. That’s the shortfall experienced by Massachusetts skilled nursing facilities to take care of MassHealth (Medicaid) patients.
To put it another way, if it costs about $88,000 per year to take care of a Medicaid patient in a nursing home, the nursing home is reimbursed by the state and federal governments only about $75,000 per year.
In fact, Massachusetts -- often ranked at or near the top in the nation in health care, education and other quality of life measures -- is the fourth worst in the nation when it comes to funding Medicaid patients in nursing homes.
And since two out of three seniors living in Massachusetts skilled nursing facilities rely on MassHealth to pay for their care, nearly half of the state’s skilled nursing facilities are now operating at a loss. Some are in jeopardy of closing.
A recent analysis of state MassHealth costs shows that the higher the number of MassHealth residents that a skilled nursing facility cares for, the higher the facility’s loss. For nursing facilities with at least 75 percent MassHealth occupancy, which represents about 40 percent of all Massachusetts facilities, the average negative margin was 1.6 percent, with a total cumulative loss of $20.3 million.
For nursing facilities with at least 80 percent MassHealth occupancy, which represents close to 25 percent of all facilities, the average negative margin was 3 percent.
As a result, the Massachusetts Senior Care Association is once again trying to convince Gov. Charlie Baker and the state Legislature to invest $90 million in the industry. The money would go directly to wages for low-paid staff. At the end of the last legislative session, lawmakers allotted only $35.5 million.
“It was a good start, but not nearly enough,” said William Bogdanovich, chairman of the board of the Senior Care Association. Bogdanovich is also president and CEO of Broad Reach Healthcare in North Chatham.
This year, the governor’s budget maintains the current $35.5 million for front-line staff wage increases. And last week, the House of Representatives approved its FY2018 budget recommendation, which also maintains the $35.5 million and adds an additional $2.8 million to reward high quality facilities (pay for performance). The House also added $15 million for reimbursement rates that could be invested in staff wages.
“We greatly appreciate the House of Representatives investment considering the slow growth in state revenues,” said Bogdanovich.
Nevertheless, the Senior Care Association is still pushing for a $90 million investment in staff wages. “We continue to believe that this funding is critical to retraining and recruiting direct-care staff and ensuring high quality care,” Bogdanovich said in an email to the Times.
“A facility’s ability to invest in staff wages and resident care is dependent upon state funding, since 70 percent of Massachusetts nursing facility residents have their care paid for by the state’s Medicaid program,” he said. “So while it’s a start, we have further ground to cover.”
And keep in mind that as the budget process progresses on Beacon Hill, with a Senate vote, a House-Senate conference committee, and the governor’s final approval, much can change between now and the end of the session in July.
Bogdanovich said that if the Legislature does not approve another $54.5 million, the consequences could be serious for skilled nursing facilities.
“Job vacancies have jumped from last year and are now at 15 percent,” he said. “It’s hard to attract and retain workers when you can’t pay much for a job that’s difficult and requires 24/7 participation.” In fact, 54 percent of front-line workers at nursing homes depend on some sort of financial assistance to make ends meet.
Fortunately, more than 130 legislators have signed on to support the Senior Care Association’s proposed bill. We urge the Senate to increase the allocation and the governor to sign it.