The CEO of Kentucky’s largest nursing home chain recently announced the elimination of 100 jobs in its corporate headquarters. He blames the need to lay off these employees on the increase in costs associated with the COVID-19 pandemic and the state’s refusal to temporarily increase Medicaid funding.
Another officer with the company cited the refusal by the state to increase Medicaid reimbursements as, “perhaps the most frustrating part of this situation.” He expressed his belief that the state could have made better use of funds it spent on creating a temporary 2,000 bed field hospital that has not been used.
The Governor and state’s top health official argued that the state has assisted nursing homes by increasing the pay for COVID-19 patient caregivers and providing testing of residents and staff. Regarding the temporary field hospital, they claim that despite the hospital not being used, it provides an important “backstop” should the need arise.
Kentucky nursing homes have been hit hard by the Coronavirus. Over 300 of the state’s COVID-19 deaths were residents in nursing homes, and three were nursing home staff.
In March, the federal Families First Coronavirus Response Act increased the Medicaid funds provided to states by 6.2%, which equates to millions of dollars in extra funding for Kentucky. However, state officials declined to increase the Medicaid disbursement rate despite nursing home administrators’ requests for additional funding due to soaring costs for personal protective equipment (PPE), cleaning supplies, costs for additional staffing, and the loss of revenue related to the state’s temporary end to elective surgeries which provided income for facilities offering temporary rehabilitation services after hip and knee replacements.
Medicaid pays a basic rate of about $195 per day per person for nursing home residents, and the state did offer nursing homes an increase in the rate to $270 per day for the care provided to COVID-19 residents.
The $50,000 per facility offered through the Coronavirus Relief Bill is not enough to offset the costs associated with the Coronavirus pandemic.
Compliance Perspective
Increasing costs of operations related to an unexpected outbreak of a disease like COVID-19 can cause a facility to experience financial difficulties necessitating undesirable budget cuts, possibly leading to closure of the facility with residents being displaced.
Discussion Points:
- Review the Emergency Preparedness Plan to determine if it addresses sustaining operations during potential pandemics and other disasters, including options for budgetary adjustments so that all essential areas continue to be funded.
- Train staff regarding the importance of observing all CMS and CDC COVID-19 protocols for infection control.
- Periodically audit to ensure that the Infection Control Program protocols are being followed and to determine that the Emergency Preparedness Plan includes appropriate steps to budget for and mitigate the effects of future pandemics and other potential disasters.
