Advocates for senior services, assisted living facilities and nursing homes packed a hearing room in the state Capitol Thursday, imploring lawmakers to increase Medicaid payment rates or else watch the already wounded industry buckle in coming months and years.
Since the last legislative session convened two years ago, 11 nursing homes have closed around the state. The hearing before the committee that oversees the Department of Public Health and Human Services’ budget was one of the first opportunities this session for lawmakers to hear directly from senior and long-term care service providers about their intensifying budget crisis.
“The majority of people we care for are people who qualify for Medicaid. They’re your retired farmers, ranchers, nurses, teachers, [a] cross-section of Montanans who’ve given all their lives to us,” said Jason Cronk, the president of Immanuel Lutheran Communities, an assisted living and skilled nursing facility in Kalispell. “We depend on the state government to help us adequately care for and serve our Montana older adults who need us.”
Montana sets the reimbursement rate, matched by the federal government, for health care providers that offer Medicaid-eligible services. Currently, Medicaid pays assisted living facilities $104 per day for helping elderly and disabled people on public insurance with their day-to-day needs, according to a recent study commissioned by the state. Nursing homes in Montana are reimbursed $212 a day for the residential care they provide to Medicaid patients.
Nursing home operators and home health agencies say those rates are woefully short of the true cost of services. With employee burnout and spiraling inflation since the COVID-19 pandemic, providers also say low Medicaid reimbursements have created a ceiling for how much they can pay their staff members.
“$15 an hour minimum is what you’re going to get to get someone to come into your building. And that’s if you’re lucky,” Michael Coe, administrator of the Pines of Polson assisted living center, told lawmakers on Thursday. “I saw the Target on my way here a couple of days ago, it was offering $20 an hour on the wall. Health care providers can’t compete with that because we just can’t increase our rates. We need to come to you to help us with that.”
Many providers reported having a steady waitlist of people requesting a bed at their facilities, or a care agent to help them with in-home needs. But with loss of staff, providers said, comes an inability to operate at the full capacity of their facilities, drying up their revenue streams from insurance and private pay. Some providers have turned to local governments to help pass levies or find other forms of assistance to keep their facilities afloat, even as they ask private payers who aren’t on Medicare and Medicare to pay substantially more than those reliant on public insurance.
The steady closure of nursing facilities, ranging from Malta to Hardin and Miles City to Hamilton, has amounted to 857 beds lost over the last two years, according to the Montana Health Care Association, an industry advocacy group.
The 2022 study of provider rates, conducted by the consulting group GuideHouse, generally matched with providers’ depiction of the funding landscape in its finding that Montana’s assisted living facilities were reimbursed roughly 20% less than benchmark standards. If the study’s recommendations were adopted for the upcoming budget, daily payments would jump to about $278 for nursing homes and $124 for assisted living — amounts providers say still might not be enough to keep pace with inflation and help operators stabilize their staffs.
But Gov. Greg Gianforte’s budget for the Department of Public Health and Human Services does not propose meeting the study’s recommendations for senior and long-term care. Instead, the budget proposes funding 58% of the differential in the first year of the biennium budget and dropping that number to 36% the consecutive year, figures the Republican administration nonetheless calls a historic investment in the state’s health care system.
“We’re proposing in our budget the largest increase in reimbursement rates in the history of the state,” Gianforte said at a press conference with reporters in the first week of the Legislature, adding that his administration also wants to expand access to in-home services to give people an alternative to nursing homes. “We’ve got to strike a good balance. In the end, we need the Legislature’s help to actually improve these reimbursement rates.”
For the next several weeks, much of that decision-making authority now rests with the bicameral and bipartisan group of lawmakers on the health and human services budget subcommittee. On Tuesday, state health department Director Charlie Brereton told legislators and industry representatives that they share a common goal of building a “stable, successful system,” and that the department will work to find solutions that have not been possible within the current budget.
“I have been asked during this [current] biennium by the industry to find the money, and the money simply doesn’t exist,” Brereton said.
Turning around to address the providers in the hearing room, he continued, “the takeaway for this subcommittee and for the stakeholders, for the providers, certainly for all of the nursing facilities, the [skilled nursing facility] operators in this room, is that we are at the table. We’re ready to work with this subcommittee to find solutions. And I’m encouraged by the progress that we’re making.”
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