Medicare Cuts: What it Means to Us

By Peggy Mullan, President & CEO

No doubt all of our readers have been following the angst on Capitol Hill over raising the debt ceiling, controlling spending and reigning in the budget.  It’s heady work, and it’s important.  But the numbers that are tossed around are almost too big to comprehend, especially those that start with a “t” for trillion.  Let’s bring the discussion a bit closer to a reality that we can all understand.

Our Beatitudes Campus Health Care Center is a place of healing and wholeness.  This year, we have cared for approximately one hundred twenty individuals under the Medicare program.  Most of these people were here for short term rehab stays and were able to return to their homes because of the excellent nursing care and therapy they received.  We have received just shy of $1,375,500 for those services, which of course went to pay the staff, the supply costs, and the electric bill, etc.

The government recently announced cuts to the Medicare program for skilled nursing care that has our hair standing on end!  We anticipate at least a twelve percent reduction in our reimbursement, based on the very best estimates coming out of our professional associations.  Annualized, that’s roughly $198,000. Couple that with the five percent reduction in our Medicaid rate, another $85,200, and the hit is huge at almost $282,000!

MedPAC, the governmental agency that studies health and health economic statistics, recently reported that over a quarter of all US nursing homes operate at a loss, with the other three quarters averaging only a slim positive margin.  Is there any common sense then in cutting so deeply?  Certainly this is not sustainable for the long run, and even in the short run it will wreak havoc in communities all across the nation.  Nursing homes have already downsized in order to find the sweet spot in their own economics.  There is nothing left to trim except the Medicare service itself. 

Americans concerned with care and services for older people all across the country are up in arms - and we are too!  Today I’ve written to Arizona’s congressional delegation, and I’ll be following up with phone calls, as well.  I hope you will join us (Go to www.leadingage.org and click on “Contact Congress” for an easy way to make your voice heard.)

My colleagues and I, who have served seniors and disabled people for all of our careers, are not prone to exaggeration; we’re not Chicken Little crying “The sky is falling!” We are concerned professionals who are adept at managing the rise and fall of health care rule and reimbursement.  But this is too much.

Won’t you help us get that message across?