Health Care and Insurance

State freeze pushes nursing care at home: FSSA clamps down on the addition of Medicaid beds

December 19, 2005

Indiana regulators have put a temporary freeze on the addition of Medicaid beds to nursing homes, as part of their push to shift care out of institutions and into patient homes.

The state Family & Social Services Administration enacted a 90-day rule starting Dec. 15. While it's in place, the state agency won't sign the Medicaid nursing facility provider agreements needed to add beds unless they fit within narrow exceptions.

In addition to imposing the temporary rule, FSSA Secretary Mitch Roob is working with state Sen. Patricia Miller, R-Indianapolis, to introduce a longer moratorium during the upcoming legislative session.

Indiana has the third-highest number of nursing home residents per capita of the 50 states, FSSA spokesman Dennis Rosebrough said.

He said reducing nursing home use and increasing home care is "a model we think is very workable and very advantageous for the patient."

It's also advantageous for state coffers. Indiana Medicaid pays $3,060 a month per person for institutionalized care, compared with $1,730 for home care.

The new rule doesn't limit the addition of nursing home beds paid for by private insurance.

Roughly 70 percent of the state's nursing home patients are covered by Medicaid, said Art Logsdon, president of the Indiana Health Care Association, an Indianapolis-based trade group representing nearly 300 of the 500 long-term-care homes in the state.

Even though Medicaid dominates nursing home reimbursement, the moratorium might not disrupt many plans. Logsdon said the construction scene already is quiet.

"Of our members, there's a provider here and a provider there that have maybe given some thought in the last six months to adding beds," Logsdon said. "But I wouldn't say there's any great plans out there."

In fact, nursing home construction has been slow for a few years. The state's bed count has declined steadily since 1999, when it totaled 58,097, according to an Indiana Department of Health report released last month.

The state had 50,361 nursing home beds last year. Since 1999, 107 facilities have closed in Indiana. Only 38 have opened.

Poor Medicaid reimbursement is the main reason. Medicaid reimburses $107 per patient per day, while the cost to provide care is about $115 a day, Logsdon said.

The state also has prodded nursing homes to reduce beds. Since 2002, the FSSA has threatened fines for homes whose occupancy for Medicaid beds falls below a certain percentage. That rate now is 85.3 percent.

This bed reduction has resulted in a more efficient care system, with one drawback, Logsdon said. Access can suffer, especially in rural parts of the state.

"Higher occupancy is good except to that family member who is trying to find a facility to care for a loved one close by," he said.

Logsdon doubts the effectiveness of the FSSA's new rule. He said developers have been able to work around previous state moratoriums or limits to construction. And if there is going to be a moratorium, he said, it shouldn't have exceptions.

"It would be a better moratorium if it were across the board and there were not exemptions, and everybody had to live by the same rules," he said.

Matt Gutwein, president and CEO of Health and Hospital Corporation of Marion County, favors the state's push toward more home-based care. Health and Hospital Corp. owns Wishard Memorial Hospital and 20 nursing homes, mostly in Marion County.

Gutwein said his company has its own program that provides care to the elderly at their homes, so they don't have to move into an institution.

Low percentages of occupied beds can hamper patient care, he said. Homes with empty beds have less money to spend on capital improvements and care, so quality suffers.

He said home care often presents the better alternative.

"Frankly, it's better for the patient, and it's lower cost to the taxpayers so we applaud [Roob's] initiative," he said.
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