PA. MEDICAID A wait for funding causes a struggle for nursing homes

The state owes millions to nursing homes that accept Medicaid recipients.
HARRISBURG (AP) -- Nursing homes are sinking into debt, deferring bills or canceling employee raises while they wait out the state's nearly yearlong quest to qualify for hundreds of millions of federal Medicaid dollars, according to state and industry officials.
Though the state has pursued the plan, it has frozen the nursing homes' per-resident Medicaid subsidy at the April 2003 rate, compounding what nursing home officials say is the problem of being chronically underpaid to serve residents who qualify for the subsidies.
A look at funds
Officials say the state owes $145 million to about 550 nursing homes that accept Medicaid recipients.
If the Rendell administration qualifies for the extra Medicaid dollars, the state could get $344 million for the fiscal year that ended June 30 and the current one, providing a significant funding bump for most nursing homes -- but in the meantime, officials say homes are struggling.
Thomas Kalkhof, the owner of Pittsburgh's 70-bed Collins Health Center, said he was considering closing the facility if he can't recoup the $85,000 he is owed by the end of the month. Nancy Kleinberg says her family-owned 123-bed Park Plaza Nursing Home in Philadelphia is $500,000 in debt and is owed about half that by the state.
Some have fared better. Philadelphia's Somerton Center, a part of the Genesis Health Care chain, has not had to make any cuts, administrator Scott Centak said, and another home reported actually owing a little money back to the state.
But nursing-home officials point out that the state ended last year with a surplus of $637 million, and think they were promised about $250 million by the Rendell administration.
The state's secretary for public welfare, Estelle Richman, said no such promise was ever made, and the money is needed for anticipated overruns in the cost of caring for the poor. She said she thinks the state will obtain the federal money it is seeking within weeks.
Richman declined to discuss a backup plan to pay the nursing homes, however.
Had permission
A senior aide to Senate Republicans said the Rendell administration had permission from lawmakers to use the $250 million for the nursing homes. Officials told him in recent weeks that the state would be disbursing the rate increase.
"There is some concern that the governor's office is backing off on a budget understanding," said Stephen C. MacNett, the Senate Republicans' lead counsel.
Created in 1965 to help states pay for medical and long-term care for the poor, Medicaid serves tens of millions of low-income Americans. In the fiscal year that ended Sept. 30, the states and federal government paid $276 billion to HMOs, hospitals and other care providers, an amount projected to reach $324 billion in 2005.
Medical care for the poor is a huge expense, consuming about one-fifth of the $50 billion that Pennsylvania expects to spend in this fiscal year in combined federal and state funds. Of the state's 1.6 million Medicaid patients, about 80,000 are in nursing homes, officials said.
The Rendell administration last year unveiled its plan to qualify for more federal dollars for nursing homes as a way to free up state dollars for other uses. If the state does not get the extra Medicaid money, Rendell has said he will cut state funding to the homes.