Higher Medicaid reimbursement needed

Posted 8/9/23

Pennsylvania nursing home providers are warning state officials of the catastrophic implications a state budget without imperative funding will have on the care of low-income seniors and adults with …

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Higher Medicaid reimbursement needed


Pennsylvania nursing home providers are warning state officials of the catastrophic implications a state budget without imperative funding will have on the care of low-income seniors and adults with disabilities. 

Additionally, the ongoing budget impasse is preventing legislative action from correcting state Medicaid reimbursement updates that are poised to create severe financial volatility—further harming the care of low-income residents. 

Such action can be incorporated in the state’s fiscal code.

“With education funding continuing to be the focus of this year’s state budget, seniors and adults with disabilities have, thus far, been overlooked—particularly those who are less fortunate and require essential and specialized nursing care,” said Zach Shamberg, president and CEO of the Pennsylvania Health Care Association (PHCA). 

“Simply put, a budget that doesn’t include adequate funding for the new state staffing mandate—and honor the commitment made to providers––will upend the entire healthcare continuum,” he continued. “In the midst of ongoing negotiations, the focus has been on future generations instead of our older generation—our fastest growing demographic, one we will all be a part of one day.” 

The 2022-23 state budget included an agreement between Pennsylvania’s former governor, Tom Wolf, legislative leaders, workers’ unions and industry stakeholders to increase nursing home staffing requirements in both 2023 and 2024 if commensurate funding was included in state Medicaid reimbursements. 

Pennsylvania funded the 2023 staffing increase, but 2024 reimbursement rates are set to fall well short of the estimated cost. Gov. Josh Shapiro’s budget proposal for nursing facilities—and the budget that currently awaits his signature—includes an approximate $3.99 per resident per day (PRPD) funding increase. PHCA has advocated for a $12.50 PRPD increase to cover the cost of the state’s staffing mandate, as well as investments to enhance the care of our loved ones and neighbors.

Complicating matters, the Department of Human Services (DHS) has performed an annual rebasing of reimbursement rates, which now factors in more provider COVID-19 costs. This change in data to calculate reimbursements has created grave financial volatility within the new rates that are intended to reimburse providers for the resident care costs already paid for by the provider. 

Nearly 4,000 Medicaid-reliant residents at 70 nursing homes are positioned to lose, on average, $19 a day in funding for their care—an extreme swing of five percent or more in rates for some providers that has the potential to close facilities and force residents to lose their care. 

PHCA has advocated for a legislative fix in Pennsylvania’s Fiscal Code to limit the volatility. With a federal deadline nearing for the state to finalize the rates, the budget impasse is fueling a doomsday scenario. 

The third concern with the budget impasse is the fate of the Medicaid Day One Incentive program, which further supports nursing homes caring for high-Medicaid populations. The budget delay leaves providers uncertain as to whether they can expect the program to timely allocate funds.

“The fallout from unfunded mandates and a reimbursement system that doesn’t account for a costly pandemic will be catastrophic for long-term care providers who are simply trying to care for our state’s most vulnerable and low-income population,” Shamberg continued. “Why is the state turning its back on the essential care of our seniors and adults with disabilities? With median operating margins already at -8.2 percent, greater financial burden will collapse the long-term care system—and ultimately, the entire health care continuum.”

Long-term care providers across the state fear the ramifications of an unfunded mandate and the financial volatility of rebased reimbursement rates, if not corrected. PHCA and its members are asking Gov. Shapiro and the legislature to support its mission of caring for the state’s most vulnerable population by fully funding the 2024 staffing ratio increase, and by returning to Harrisburg to correct the issue with the state’s rebased reimbursement rates before providers are forced to make unwanted operational decisions. 

Ed. note: The column was originally sent early on August 4, before Shapiro signed the budget. Afterward, PHCA added that the only difference is that the budget falls short of reimbursing providers under the mandate. The rebasing issue can still be fixed, but lawmakers need to return to Harrisburg and sign off on the fiscal code.

Contributed by the Pennsylvania Health Care Association.

medicaid, reimbursement


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