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State Allocates $10M for Nursing Homes Buffeted by Changes in Medicaid Spending

Equal match in state and federal funds works out to roughly $1 per patient per day

nellie haycock steve sweeney
Arbor Glen resident Nellie Haycock, 95, talks about her great-grandchildren with Senate President Steve Sweeney.

New Jersey’s nursing-home industry is facing a major upheaval. For the past year, the state has been redirecting Medicaid long-term services and supports away from conventional nursing facilities and toward home- and community-based care, which they believe will be more beneficial to recipients as well as more cost-effective in the long run.

In recognition of this disruption, however, state legislators and Gov. Chris Christie have signaled their continued support for the industry by adding $10.5 million in combined state and federal funds for nursing care.

Industry advocates hailed the added funds as an important step in closing the gap between the cost of providing care to Medicaid recipients and the amount they receive from the program. And legislators, along with a key voice in organized labor, said the funding would help nursing workers receive enough pay to support their own families. The additional money is split between $5.25 million in state funds and an equal match from the federal government.

Senate President Stephen M. Sweeney (D-Cumberland, Gloucester, and Salem) and Sen. Richard J. Codey (D-Essex and Morris) -- leaders in the effort to add the funding -- spoke yesterday about the importance of supporting nursing homes, their workers, and their residents. They met with labor leader Milly Silva and nursing-home workers and executives at Arbor Glen Senior Living Facility in Cedar Grove to discuss what the funding will mean for local facilities.

Sweeney said the state has to balance funding for community-based care with that for nursing homes.

“As much as you want to move (funding) away and you want people to stay in their homes as long as they possibly can, the level of support for the families, you know, needs to be there,” he said. “There’s always going to be a role for nursing homes.”

Silva, executive vice president of Service Employees International Union Local 1199, said it’s “wonderful if you are able to remain at home,” with the help of home health aides.

“But the reality is, that that will not be an option for some of us,” she said, adding that it’s important to provide enough funding to nursing homes to enable them to hire and train workers that can handle the “more complicated” cases that require around-the-clock nursing care.

Sweeney also said nursing-home workers are underpaid, considering the “back-breaking” work they do, and he expects the funding to lead to higher compensation.

“I would hate to put someone in a nursing home, but if they have to go in one, I’d like it to be clean, I’d like the employees to be well-trained,” and committed to their jobs, Sweeney said.

James W. Tabak, senior vice president for administration and government affairs at Arbor Glen owner Genesis HealthCare, said the funding would enable nursing homes to be able to “do more for our residents and do more for our employees.”

He added: “The bulk of it will go to our labor costs -- 70 cents on the dollar goes to our wages and benefits for our employees.”

Silva also described the additional funding as “an opportunity for nursing-home caregivers to see that there will be additional staff who are going to work in the facility alongside with them, so that they can provide the kind of care they really want to give the seniors.”

Codey added that he sees nursing homes playing an increasingly large role, in part due to the projected rise in the number of patients with Alzheimer’s disease.

“As we age as a society, modern medicine is keeping us alive longer,” Codey said, noting that Alzheimer’s is rising rapidly while cancer and heart disease rates are declining.

“More and more people are going to be coming to your facilities,” requiring 24-hour care, Codey predicted.

Jon Dolan, president and CEO of nursing home industry trade group the Health Care Association of New Jersey, said the funding increase may not be large considering the overall size of the $1.8 billion Medicaid nursing program, but it’s significant.

The reimbursement equals 63 cents per patient per day for those in assisted-living programs, following a $2.50 per-patient per-day increase last year, as well as additional funding for skilled and special-care nursing facilities. It’s the fourth year of incremental increases in funding, and Dolan said that it was important that the state maintained its “forward momentum,” in building Medicaid funding. Altogether, the funding should equal about $1 per day per patient.

“It’s just a buck, but it’s a very important dollar,” for nursing homes that operate with persistent shortfalls in Medicaid funding, Dolan said.

Dolan added that nursing-home funding has maintained bipartisan support from lawmakers like Sen. Kevin O’Toole (R-Bergen, Essex, Morris, and Passaic) and Assemblyman Gary S. Schaer (D-Bergen and Passaic). He added that many have personal experience with family members who’ve been in nursing facilities, leading to legislators supporting the program through a combination of “the head and the heart.”

With the state long-term-care focus shifting toward home- and community-based services, Dolan said it’s important that New Jersey “stay ahead of the curve” in funding nursing care, since the patients who remain in nursing homes will tend to be older and sicker.

“They’re much sicker people. They’re coming to us later,” Dolan said of those who aren’t able to remain in their homes.

And Dolan acknowledged that it would have been difficult to receive more funding for Medicaid medical and nursing care for seniors, which totals $1.8 billion.

Christie spokesman Brian Murray said that while the governor has made community-based long-term care a priority, he saw the need to also add funds for nursing homes.

“The individuals who do need the type of services that only these facilities can provide tend to be much older and sicker, therefore their medical needs are costlier to the facilities,” Murray wrote in an email. “The inclusion of additional nursing-home funding, which will be equally matched with federal dollars, ensures those most vulnerable individuals are getting the assistance they need.”

Dolan said the administration is making progress in another area, assisting nursing homes that must carry the costs of providing newly admitted residents who have applied for Medicaid but haven’t yet been accepted. While Christie vetoed language in the budget that would have provided partial funding to help nursing homes with these costs, administration officials met with Dolan yesterday and laid out several strategies that could lead to shortening the wait time for these “Medicaid-pending” residents.

While Medicaid is the primary health coverage program for low-income residents, it’s also a crucial funding for nursing care. One reason that’s true is because many people spend down their assets until they become eligible for Medicaid. Dolan said that roughly 60 percent of New Jersey long-term-care recipients receive Medicaid funding, making it “more akin to a college-loan program than a social-welfare program” in the range of residents that it benefits.

Dolan cited estimates that the statewide real cost of providing nursing care is $240 per day per patient, but Medicaid only pays $210. In 2014, New Jersey had the seventh-largest gap in funding of 34 states with available data, according to the American Health Care Association.

And when the facilities are working well, their residents are grateful.

Rolf Habermann, an Arbor Glen resident with dementia, first arrived at the facility “to die” six years ago, said his wife Grange Habermann. Since then, both his physical and mental health has improved, which his wife attributed to caring staff members and a busy activity schedule.

“It’s really a family,” she said of the facility.

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