Senate Bill S222A

                                BILL NUMBER:S222A

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.1051  of 2009/2010; Referred to Health
S.46    of 2007/2008; Referred to Senate Social Services,
           Children and Family Committee
S.1164A 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, 2013.