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Nursing Home Industry Ready to Battle Over Medicare Funding

Nursing homes are getting ready to fight for Medicare funding, in case reimbursement cuts are introduced by lawmakers. It is possible for Medicare funding changes to take place in the future, leaving many such facilities with significantly decreased financial resources, The Hill reports.

According to a June 2013 report, Obamacare is expected to reduce the part A Medicare funding for nursing homes by nearly $716 billion over the coming 10 years. Other facilities that will be affected by the cuts include hospices, skilled nursing facilities and hospitals.

Limited Access

Needless to say, such cuts will severely limit the access of senior citizens to medical services. The average national cost of having a private room in a nursing facility is $230, according to a 2013 Cost of Care Survey. Medicare reimbursement cuts will leave beneficiaries paying significantly larger bills.

Nursing homes and facilities are anticipating the changes and getting ready to fight them. Two industry groups have already merged under American Health Care Association (AHCA), getting ready to lobby against the proposed changes in the fall of 2013.

Representatives of medical facilities in Landau scrubs, are ready to suggest a deal, in an attempt to prevent lawmakers from approving the Medicare reimbursement cuts. Non-hospital patient facilities suggest that they will be capable of generating their own federal budget savings of $2 billion over the coming 10 years. The goal will be accomplished by reducing the number of patients that are being sent back for hospital treatment.

This strategy could be challenging for some nursing homes. It will signify a radical change of procedures, especially when there is confusion and uncertainty about the condition of the patient and the type of care that would be needed.

Re-admissions a Problem

Hospital readmissions are already a serious problem. Beginning in August 2013, Medicare is fining hospitals in all states to reduce the number of monthly patient readmissions. The fines are expected to generate approximately $227 million. This penalty program was launched in the fall of 2012 as part of Medicare’s attempts to rewards hospitals for good performance rather than for the number of treated patients.

The vacation month of August will give AHCA enough time to come up with alternative proposals and solutions, as well. 

The fight against the Medicare funding cuts is happening at a time when the nursing home sector is being revolutionized. Traditional nursing homes are becoming diversified and seniors now have numerous options. The niche now encompasses various outpatient facilities. Nursing facilities and assisted-living centers are now a part of the market segment.

A Growing Population

As the US population ages, experts predict the number of nursing and senior care facilities needed will increase. In the coming 20 to 30 years, the number of nursing care facilities is expected to double.

According to a Daily Herald report, the proposed cuts are putting schools and nursing homes in a battle for resources. The population of the country is aging and as Baby Boomers retire, the situation will worsen. National expenditure on services for the poor and the elderly will probably increase by 87 percent until 2021, Centers for Medicare and Medicaid Services reported. Medical assistance is already consuming a large portion of state budgets, being followed by the K-12 education’s financial needs.

All nursing facilities will experience serious problems due to the Medicare reimbursement cuts. Financial resources are needed to cover losses that such outpatient facilities incur by providing services to Medicaid patients. The Medicaid state-set rates are insufficient to cover the costs of long-term care in an outpatient facility like a nursing home.

The fate of nursing homes will probably be determined in the fall of 2013, after the August recess. One thing is clear — the industry lobby will not go down without a fight.