Senate Bill S1051

                                 BILL NUMBER:  S1051

 TITLE OF BILL :
An act to amend the social services law, in relation to state
reimbursement for care, treatment, maintenance and nursing services in
nursing homes


 PURPOSE :
To make the state's Medicaid financing system more equitable for those
counties that operate nursing facilities.

 SUMMARY OF PROVISIONS :
This legislation would add a new paragraph to the Social Services Law,
increasing the percentage of Medicaid costs that are reimbursed to
certain counties by the State for long term care services. Currently,
the federal government pays for fifty percent of the cost of Medicaid
Services and local social services districts are reimbursed 81.235% of
the remaining costs (non-federal share) of Medicaid eligible long term
care services by the State. Under this legislation, counties would be
eligible for an enhanced state reimbursement rate if they had a
non-state public nursing facility operating within the county for the
previous twelve months and that nursing facility had operational
losses in that time period. The enhanced rate would be set at an
amount that would offset the losses incurred by the facility and would
apply to all eligible Medicaid long term care services paid by the
              

county.

 JUSTIFICATION :
According to an independent study, county operated nursing facilities
received substantially less revenue than other nursing facilities
because the county operated facilities provided significantly more
care to patients that are less profitable because of income/insurance
status or because of diagnosis (such as Alzheimer's Disease).
Consequently, county government taxpayers are often called upon to
subsidize the operation of these facilities when they incur operating
losses.  Unfortunately, these same taxpayers are required to
separately bear the "local share" cost of Medicaid long term care
services. This legislation would ensure that these local taxpayers are
not required to pay a "double tax" to support appropriate long term
care services in their counties. Private sector nursing homes
typically target individuals with the ability to "self-pay" for at
least a limited period of time or who have some level of private
insurance. These individuals relatively quickly "spend- down" the
private source of payment and qualify for the Medicaid program.
However, the high level of private payments received before
qualification for the Medicaid Program often provides the difference
between losses and profits. The nursing home industry in New York
State has long demonstrated that Medicaid rates do not cover costs
that the difference is made up by private payments. Consequently,
individuals that are already enrolled in the Medicaid program prior to
admission into a nursing home facility are considered money-losing
patients to whom most private sector nursing homes cannot afford to
provide services. Because of the commitment of county governments to
providing services to this population-- and finances by hundreds of
millions of dollars in subsidiaries--county nursing facilities are
left to provide care to this population. Most county facilities have a
written admission policy often times enacted by the county legislature
that requires the county facility to admit individuals already
enrolled in the Medicaid program before admitting individuals with the
ability to pay through private sources of funding. Without the county
facilities, individuals already enrolled in Medicaid would face
significant difficulties in accessing nursing facility services in a
timely manner.  This is particularly true of individuals already
enrolled in Medicaid that lack social supports and/or regular and
appropriate medical care and consequently have more medical and social
complications with their primary diagnosis or disability.
Additionally, county facilities are more likely to provide services to
other individuals that are not eligible for desirable levels of
reimbursement. In the cost-based system in place from Medicaid nursing
facility reimbursement prior to 1986, it has been documented that
county facilities provided care to patients with the highest case mix
intensity because other sectors could not afford to be burdened with
these costly cases. In 1986, New York state instituted a case-payment
methodology for Medicaid nursing facility reimbursement that rewarded
nursing facilities for taking more medically involved, complex cases.
However, that resulted in access problems for many individuals with
low medical intensity, but additional non-medical needs. For example,
New York State has had problems with access to nursing homes for
patients with Alzheimer's Disease- the combination of low-medical
intensity and high staff costs associated with monitoring result in a
reimbursement/cost imbalance. County facilities now are the provider
of last resort for these individuals reimbursed as "low intensity" but
actual higher costs of care.

 LEGISLATIVE HISTORY :
S.46 of 2007/2008; Referred to Senate Social Services, Children and
Family Committee
S.1164-A of 2005/2006; Referred to Senate Social Services Committee
S.5854 of 2004; Referred to Senate Social Services Committee

 FISCAL IMPLICATIONS :
Operational losses incurred by county operated nursing facilities over
the past several years range from periods where the statewide average
was over $40 million in annual losses a year to years where there were
no losses.

 EFFECTIVE DATE :
This act shall take effect April 1, 2010.