Wednesday, January 15, 2014
I had the opportunity to represent the NC Health Care Facilities Association before the Medicaid Reform Work Group today. My job was to advocate for the high quality, underpaid nursing homes of NC whose rates have been cut, whose rates have risen only 2 tenths of 1% since 2008, and are facing even more cuts. Who gets hurt? Our indigent parents and grandparents! See my remarks below. Thank you Mr. Chairman and Members of the Medicaid Reform Work Group. My name is Ted Goins. I’m President and CEO of Lutheran Services Carolinas based in Salisbury. I am here today representing the North Carolina Health Care Facilities Association. I’m joined by our President and CEO, Craig Souza. Since 1955, our organization has represented North Carolina’s skilled nursing home providers, both for profit and not for profit. Today there are 406 licensed skilled nursing facilities in North Carolina. States are mandated to provide skilled nursing care as a part of its Medicaid program. SNFs are a vital component of North Carolina’s comprehensive long term care system. It’s a system that focuses on person centered care, promotes choice, and offers a wide array of home and community based services. The North Carolina Health Care Facilities Association understands the need for Medicaid reform. Reform to me means “change for the better” and to achieve meaningful change for the better we must concentrate on program and systems reform, NOT just payment reform. Hundreds of thousands of North Carolinians are depending on us to get it right. We applaud the Department for recognizing that collaboration between all stakeholders will be required for reform efforts to succeed. Providers must play an active role in the debate. A debate that must be open, honest, and encourage new ideas and innovation. Much can be learned from the experiences of other states, but at the same time we should encourage and promote home grown solutions. To that end we want to thank Bob Atlas and Mardy Peal for their leadership in creating an environment that promotes openness and the full engagement of providers. No one would disagree with the three reform objectives established by the General Assembly: *Create a predictable and sustainable Medicaid program for taxpayers. *Provide care for the whole person by uniting physical and behavioral health. *Increase administrative ease and efficiency for NC Medicaid Providers. To have any chance of success DHHS and the General Assembly need to invest the necessary resources to enable Medicaid to function like the multi-billion dollar human services agency that it is. Reform needs to be done correctly, not quickly. Although budget predictability and certainty are the mainstays of reform, the program also needs stability, immediate stability. As we plan for reform, Medicaid “life” will go on. Best case, "reform" moves forward by maybe 2016 or 2017. In the meantime, we still have to do our jobs. We cannot compromise care while deciding what reform means. Hundreds of thousands of North Carolinians depend on Medicaid for vital health care services. Hundreds of thousands are also employed by hospitals, nursing homes, physician offices, and others. All providers want a predictable and sustainable Medicaid program. We need a system that is free of unnecessary regulatory burdens. We need state agencies that are responsive and data driven. We need reliable budgeting and accurate forecasting. We need sound reimbursement policies that reward quality and efficiency. And we need predictable and adequately funded reimbursement rates. And finally, we need a reliable claims processing system. Nursing homes ARE predictable. Utilization of skilled nursing services has steadily declined since 2009. Budget-wise, it’s pretty easy to project Medicaid payments to nursing homes. Daily rate times days of service. There you have it. I guess one could argue nursing home expenditures are already capitated. Medicaid rates for nursing homes are paid on a per diem basis. A facility receives a daily rate for all services provided. There are no additional fees. We are not fee-for-service providers. Nursing homes are also subjected to a federally sanctioned provider assessment program. The assessment draws down federal funding that reduces North Carolina’s matching rate (FMAP) for skilled nursing care. For every dollar spent on Medicaid services, the State pays roughly 35 cents and the federal government pays a matching rate of 65 cents per dollar. Because of the provider assessment, the effective state matching rate is about 20.8% or 21 cents per dollar. Since 2008, nursing home rates have increased by two tenths of one percent (0.2). Data shows costs for the same period have increased more than 10.5%. Ladies and gentlemen, I refer you back to the stated goals of reform. Objective #1: To create a predictable and sustainable Medicaid program for NC taxpayers. Not recognizing the impact of cost increases is not sustainable now and unless rectified, it will be a major barrier to meaningful reform. Interestingly, when private managed care is discussed as one of the possible options for reform, roughly 10 percent of the anticipated payments to MCOs is allowed for administrative costs and profits. I believe most Medicaid providers would gladly accept similar or even more reasonable terms. And the resources would remain in North Carolina. In spite of the challenging times confronting skilled nursing care, recent data from CMS and the OIG report that North Carolina nursing homes had the lowest hospitalization rates among the eight states in CMS Region IV, the southeastern U.S. We also had the largest percentage reduction in the use of anti-psychotic drugs in the nation. I mention these two issues because they were national benchmarks established by CMS and they can be areas we can build on as we make person-centered care a pivotal part of improvements to our Medicaid program. We have much to do. We have the talent within our State’s borders to build the nation’s best Medicaid system. We welcome the opportunity to engage in reform efforts. Mr. Chairman and members of the Medicaid Reform Advisory Group, I appreciate the opportunity to appear before you today. We are grateful for your leadership and we look forward to working with you. Thank you.