Wednesday, December 7, 2011

Feeling the Pinch

Graphic by AHCA Public Affairs
As communities and providers feel the pinch of the tightening budget belt, The Moran Company released a study this week, echoing the fact that operating margins of nursing care centers are razor thin. The report emphasizes the concern advocates across the nation are raising about protecting seniors’ access to care.

The study, commissioned by the American Health Care Association to examine the potential, financial impact of changes to Medicare reimbursement policies, reiterated the fragility of the long term care industry.  The Moran Company, an external research and consulting firm, evaluated the operating margins of nursing facilities for most recent available data (FY 2009) and found that margins were at 0.75%.  This finding confirms the previously reported MedPAC data that margins for the industry are threateningly low. 

As Congress’s end of the year agenda includes debates over budget bills, the long term care industry is facing even more damage through cuts and reductions to Medicare. The sector has already absorbed billions of dollars of reductions this year, and the study reaffirms the profession’s message that further cuts would deeply threaten seniors’ and individuals’ with disabilities access to care.

The Moran study also calculated the projected impacts of some of the budget policies that Congress will vote on by the end of December, such as the “doc fix” and therapy cap extensions.  Changes to these and other reimbursement bills don’t just trim the operating margins of nursing homes, but—if enacted—could push margins clear into the negative.

“Many may not want to mention margins when it relates to health care providers, but the fact of the matter is without a margin, it’s just not possible to keep operating,” said Mark Parkinson, President & CEO of AHCA. “Congress must understand that additional cuts to skilled nursing care threaten this critical role we play in the health care continuum.”

AHCA is actively distributing the study’s findings on the Hill in an effort to advocate for the protection of Medicare funds for skilled nursing providers.  Negative margins could result in limited access to care and a potential increase in costs for current and future residents and their families.

For more information on the report and AHCA’s response, visit the AHCA/NCAL website. 

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