LeadingAge: SNFs Need Medicaid Rate Bump, Payer Structure Overhaul

Skilled nursing facilities need a boost in Medicaid reimbursement rates to pay for increased caregiver compensation, as well as an overhaul of the current payer structure, according to a six-strategy vision report from the senior care advocacy group LeadingAge.

LeadingAge released the report, “Feeling Valued Because They are Valued,” on Thursday, a timely push as Congress debates President Joe Biden’s $2 trillion American Jobs Plan proposal. The document details the organization’s long-range vision for the industry.

Medicaid is the largest public payer of the long-term services and supports (LTSS) financing system, encompassing 57% of national spending, researchers Robyn Stone and Natasha Bryant said in the report.

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Operators must also pledge to tie increased rates to nursing aide wages, the report noted. Facilities in states that raised reimbursement rates between 2019 and 2020 increased wages marginally, oftentimes not keeping up with inflation.

Skilled nursing facilities have had to contend with mandates in certain states for an increased minimum wage, which were not paired with adequate Medicaid reimbursement rate increases, the report continued.

“To remedy this situation, several states have adopted ‘wage pass-through’ measures requiring providers to use any new Medicaid payments to increase staff wages,” the report said. “These approaches are not as effective as they could be because they have limited time frames, have not been sustained, and have been difficult to implement when consumers hire aides directly, rather than through an agency.”

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LeadingAge suggested reforming the financing system altogether by exploring social insurance approaches to fund LTSS. Researchers said the current system isn’t sustainable if Medicaid continues to be the primary source of financing.

The organization pointed to Washington state’s new social insurance program as a model for the future. Established by the Long-Term Care Trust Act, the state is financing the program with a 0.58% payroll tax that translates to a payout of $36,500 per person in need of LTSS dollars.

“The infusion of insurance-based dollars into the LTSS system can provide additional and more consistent financing that, in part, can help ensure more adequate wages for the LTSS workforce,” researchers said, adding that other bills placed before Congress would move payment away from Medicaid’s safety-net approach to a social insurance concept.

Remaining strategies included in the report suggest expanding the caregiver pipeline; a focus on education and training; facilitating career advancement; and preparing workers for multiple settings in the care continuum. Caregivers should receive cross-training for assisted living, senior housing and home care, in addition to nursing homes, according to LeadingAge. The national organization represents more than 5,000 non-profit aging service providers.

“The COVID pandemic shed new light on how valuable these professionals are, but also made clear that America does not have the infrastructure for aging services that we need,” Katie Smith Sloan, president and CEO of LeadingAge, said in a statement. “Care workers like nursing assistants, personal care aides, and home health aides are the heart of aging services. This vision sets out a path toward the sustainable, reimagined workforce of professional caregivers that our nation needs to ensure better care for millions of older Americans.”

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