Engler proposes fees on nursing homes to bolster Medicaid

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Capital News Service
LANSING — In hopes of boosting federal funds, Gov. John Engler introduced a new Medicaid proposal that would assess fees on state nursing homes and HMOs.
The Medicaid Quality Assurance Assessment Program would impose a daily charge of $2.77 per nursing home bed and 1.93 percent of premiums for the Medicaid Health Maintenance Organizations. With the generated $100.4 million, the federal government would then supplement it with $122.8 million.
State health organizations agreed to impose these charges on individual homes and providers for the “betterment of the whole community”, said Kelly Chesney, director of communications for the state budget office. The assessed fees will then be matched by increased federal dollars.
“We are limited in state dollars,” she said. “So this will target the areas that need it most.”
One of the nursing homes that will experience a decrease in funding is Midland’s King’s Daughter Nursing Home. If implemented, the proposal would drain the home of $29,300 in revenue.
Increasing Medicaid is an important issue for both the Legislature and state health organizations, said Sen. Joel Gougeon, R-Bay City, chair of the Senate Appropriations Community Health Subcommittee.
“Getting more money vis-a-vis federal tax dollars is a good program,” he said. “We are enhancing our money by giving 40 cents and getting back a dollar.”
Representing about half of the state’s nursing homes, the Health Care Association of Michigan said the new funds will be useful for facilities that desperately need funding.
“The homes that have the greatest difficulty surviving are those that have the highest commitment to Medicaid,” said HCAM President Reginald Carter.
With the support of both HCAM and the Michigan Association of Health Plans, legislators feel confident about quickly passing Engler’s program.
“As long as the industry’s on board, then I don’t know why we can’t do it now,” Gougeon said. “I think this can have an immediate effect.”
Despite the supplemental federal funds, not every HMO will see in an increase in dollars. Two out of 19 HMOs will lose funds, along with the 28 of 400 nursing homes.
Care Choices Michigan, a nonprofit health care organization, is one of the two HMO plans that will see their Medicaid funding increase less than their total assessment. This tax is “an inappropriate response to the state’s fiscal restraints,” according to a statement made by the Farmington Hills-based organization Wednesday.
Eugene Farnum, executive director of the Michigan Association of Health Plans, said the loss to some organizations was unavoidable because of the immediate need for increased Medicaid funding.
“This is a short-term program that tries to move through the budget crunch,” he said. “It was a difficult decision and we wrestled with it a lot.
“Everyone understood that some would have problems, but we went forth with it to make the whole better.”
Rep. Mickey Mortimer, R-Horton, contends that the “one-for-one short-term loan” is the only way to relieve budget pressures while benefiting the majority of Medicaid providers.
“We had to look at the greater good with the issue,” he said. “I have to give credit where credit is due and this new program will help bring some money back to Michigan instead of being a donor state.”
Engler’s deputy press secretary Matt Resch, said that although the legislative leaders hope for a quick adoption of the proposal, it has not been decided when or how the measure will be introduced.
© 2002, Capital News Service, Michigan State University School of Journalism

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