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Lawmakers getting closer on nursing home moratorium

March 11, 2014

State lawmakers are close to approving a measure that would place a moratorium on the construction of new nursing homes except in certain cases.

Lawmakers from the Indiana House and Senate met Tuesday to hash out concerns.

Supporters of the moratorium say too many nursing homes have been built in Indiana in recent years, bringing average occupancy down to 70 percent. They say a pause is needed to ensure Medicaid recipients continue to get satisfactory care.

House Public Health Chairman Ed Clere said Tuesday that negotiators had found a compromise that would ban new construction for two years except in counties whose nursing homes are at 90-percent capacity or higher.

The fight has set owners of existing homes against developers who have been expanding rapidly in anticipation of retiring Baby Boomers.

Opponents of the measure, including a broad coalition of unions and developers, have said a moratorium would cost the state jobs and violates free market principles. But supporters say limiting the number of nursing homes could ensure Medicaid patients, who often have lower reimbursement rates than Medicare patients, are spread among existing nursing homes and get adequate treatment.

"Most states either have a moratorium or a certificate of need process," said House Speaker Brian Bosma, R-Indianapolis. "While we like to talk about a free market — and I'm a chief proponent of free market principles — this is really a controlled market. It's controlled by the government. Some 83 percent of funds received by the nursing home industry come from government. We say what they can charge. We say how many staff they have to have on hand."

The House passed the measure 55-40 on March 3 and sent it to a conference committee for final negotiations. That version called for a moratorium through June 30, 2015.

Negotiations throughout the session scaled the program back from a five-year ban to only one year and finally to two years. Nursing homes in development as of June 30 would be exempt from the moratorium.

Whether the abbreviated ban will have a great impact on the growth of nursing homes is unclear. A Legislative Services Agency report shows that might not be enough time to see a decrease in requests to build new homes, and developers might speed through more applications than usual to beat the June deadline this year.

The proposal also aims to tackle other issues of care for the elderly or disabled, including creating a pilot program requiring an Area Agency on Aging to supervise and advocate for patient health.

"It's very difficult to manage these type of services on your own when you have complex medical needs," Family and Social Services Administration Secretary Debra Minott said.

The most recent proposal also would allow a state oversight agency to audit and penalize AAAs for violating the new requirements, adding teeth to the legislation.

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