Governor to release additional funds to nursing homes that care for poor

Medicaid serves tens of millions of low-income Americans.
HARRISBURG (AP) -- Gov. Ed Rendell has agreed to release additional money to nursing homes that care for the poor rather than wait for hundreds of millions of dollars in federal Medicaid money for which the state is trying to qualify.
Lawmakers and industry officials met late last week with members of the Rendell administration, which they have accused of having reneged on a promise to fund reimbursement rate increases for the nursing homes. At least one home had threatened to close in the coming days.
Administration officials, who contend they never promised the money, had hoped to keep any reserves to help balance next year's budget, which will not have the benefit of $344 million in federal aid, as this year's did.
"I have concluded that our state's nursing homes cannot wait any longer for the rate relief they need," Rendell said in a statement.
Officials say the state will release $66 million, qualifying for an extra $82 million in federal Medicaid funds, and distribute the combined $148 million to about 550 nursing homes that accept Medicaid recipients.
Earlier plan
The administration's earlier plan, unveiled last year, involved assessing $252 million in fees on nursing homes in order to qualify for $344 million in Medicaid funds. The combined $596 million would then be redistributed to the nursing homes that paid the assessment. Without those federal funds, Rendell said he would cut funding for nursing homes.
While it pursued the money, the administration froze the nursing homes' per-resident Medicaid subsidy at the April 2003 rate. But the Rendell administration tried the strategy at a time when other states, beset by rising welfare bills, were trying to get more Medicaid dollars, too, and the Bush administration introduced tougher scrutiny of state Medicaid funding requests.
The quest has now stretched to a year, and nursing home owners say they are sinking into debt, deferring bills or canceling employee raises while they wait. The money the administration is to release would advance reimbursement rates to the April 2004 mark.
"We are certainly pleased that they finally recognized the severe situation and are at least updating the rates," said Ron Barth, the president of an association of nonprofit nursing homes and other senior care services.
Serves millions of poor
Medicaid, created in 1965 to help states pay for medical and long-term care for the poor, serves tens of millions of low-income Americans. Medical care for the poor makes up 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 75,000 are in nursing homes, officials said.
Rendell's budget secretary, Michael Masch, said that the state is "in risky territory" because it is spending $66 million that he doesn't consider it to have.
Thomas Kalkhof, the owner of the 70-bed Collins Health Center in Pittsburgh, had threatened to close by the end of this month without the money.
"It's a big step in the right direction," Kalkhof said. "It wasn't that the money wasn't there. It was just meant for other purposes."
The Senate Republican leader, David J. Brightbill of Lebanon County, said he thought the administration had been in "a game of chicken" to force the federal Centers for Medicare and Medicaid Services to approve the state's application before nursing homes began closing.
"We've got to be fair with the nursing homes because we'll go from a minor crisis to a major crisis if one or more goes under," Brightbill said.
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