Medicaid cuts to N.J. nursing homes could mean staff layoffs

Tuesday, 20 December 2011 14:56
health120711_optBY BOB HOLT

The number of aging baby boomers who need care is increasing, but big cuts in Medicaid and Medicare are hurting the revenues of health care providers.

In New Jersey, operators of nursing homes were looking for budget cuts from the state this year. But even with a new reimbursement system, things have gotten worse than a lot of them had expected. reported that back in July the state planned to move to a system that would reimburse nursing homes with patients who required greater care at a higher rate. But state officials realized that homes containing healthier patients would lose significant revenue from the move. So the new rules changed again, to prevent any home's rates from moving up or down by more than $10 a day.

Before the system was able to take affect, the new state budget reduced Medicare spending on long-term care by $75 million, which meant a 3 percent cut for nursing homes across New Jersey. The state wound up cutting rates to nursing homes that hadn't already felt a loss. reports that many New Jersey nursing homes will be seeing 8 percent cuts in their budgets, and many had received the news after setting salaries, staffing levels and employee benefits for the new fiscal year.

Christian Health Care Center in Wyckoff, which has 68 beds for sicker patients, saw its Medicaid-patient reimbursement rate drop from $198 to $187 per day, although the new rate system had said they would increase the number to $225.

According to Biz Times, results of an Alliance for Quality Nursing Home Care survey shows that recent Medicare cuts will cause at least 20,000 potential layoffs in the industry and prevent about 20,000 new jobs in skilled care nursing facilities from being created across the U.S.

However, the Alliance says the impact of the $79 billion in reductions over the next 10 years can be “significantly alleviated” by phasing them in over a three year period, according to Senior Housing News.

New Jersey already has plans to contract with private managed care companies in an effort to cut Medicaid costs.