Nursing homes brace for fee hike

Published 10:23 pm Saturday, March 21, 2009

Nursing homes throughout Lawrence County said Friday that a fee increase proposed by Gov. Ted Strickland to cover rapidly rising state Medicaid costs will result in lost jobs and higher patient costs.

As part of his two-year budget plan, Strickland is considering shifting a larger portion of Ohio’s Medicaid costs to nursing homes, a proposal that Lawrence County health care centers say is unacceptable based on current standards and regulations.

The governor contends the additional revenue, from an increase in Ohio Nursing Home Franchise Permit Fees (FPF), would allow the state to keep up with rapidly growing Medicaid costs and free up state funds for other uses. Estimates have the increase bringing in an additional $285 million to the state coffers during 2010 and 2011.

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Franchise Permit Fees are payments Ohio nursing homes pay to the state based on the number of beds for which the health center is currently registered or licensed. The current rate is $6.25 per day, per bed. Strickland’s proposed increase would take the daily bed rate to $11.50.

That increase, a gathering of area nursing home officials told State Rep. Todd Book (D-McDermott), Lawrence County Commissioner Les Boggs and Ironton Mayor Rich Blankenship, would be tantamount to possible collapse.

JoLinda Heaberlin, owner of Jo-Lin Health Center in Ironton, who hosted the meeting, said her FPF assessment based on Strickland’s proposal could increase nearly $305,000 annually if implemented.

With 159 licensed beds, Jo-Lin is scheduled to pay the state $362,718 in FPF fees for fiscal year 2009. If the daily rate was increased, that number would rise to $667,402.

Heaberlin said she would have no choice but to layoff employees which would result in a possible drop in service the health center could provide. With 215 employees, Jo-Lin is the second largest private employer in Ironton.

Medicaid is the health insurance program for individuals or families with low incomes and resources. But unlike Medicare, which is solely a federal program, Medicaid is a joint federal-state program funded through combined state and federal tax dollars.

Ohio operates its own Medicaid system, but it must spend its own tax revenue in order to conform to federal guidelines for it to receive matching funds and grants from the federal government.

The federal matching formula is different from state to state, depending on each state’s poverty level. The wealthiest states only receive a federal match of 50-percent while poorer states receive a larger match. Medicaid currently provides health coverage to more than 1.8 million people in Ohio at a cost of nearly $12 billion a year.

State statistics show that FPF are paid on 34 million total bed days annually. However nursing homes only get reimbursed on beds occupied by Medicaid patients.

And while Lawrence County nursing homes do and will continue to receive Medicaid reimbursements back on their FPF fees, where nursing homes are concerned is for patients who are not eligible for Medicaid or a string of empty beds which still have to be paid on. Those FPF are not reimbursed back to the health centers.

Jean Dalton, Jo-Lin’s chief financial officer said her facility had 5,000 empty bed days in 2008 that resulted in $800,000 in lost revenue and an additional $31,250 paid to the state in FPF that Jo-Lin was not able to recoup.

“Please tell me one other business that pays to put themselves out of business. We are funding ourselves out of business,” Dalton said.

“Do we have to be put in a position that we have to say ‘if you don’t have Medicare or Medicaid we can not let you in’” Ron Lyons of South Point’s River Bend Nursing Home added.

On Thursday, Lawrence County Commissioners passed a resolution officially opposing the franchise permit fee increased proposed by the governor.

“This would have devastating impact on Lawrence County and the city of Ironton,” Boggs said on Friday.

Strickland’s proposed budget is scheduled for a House vote on April 24, Book said.

By law, both chambers of the Ohio legislature must have a budget passed and in place by July 1, 2009.