Higher Reimbursement Helps Mahoning Nursing Homes
YOUNGSTOWN, Ohio -- Organizations that operate skilled nursing centers in the Mahoning Valley have won a partial victory in their quest to have the state of Ohio reclassify how it reimburses these centers through its Medicaid program -- an issue that has dogged the industry here nearly eight years.
“We’re celebrating on one side and scratching our heads on the other,” remarks John P. Daliman, corporate counsel for Girard-based Windsor House Inc., which owns and operates skilled nursing and assisted living communities in Mahoning, Trumbull, Wayne, and Columbiana counties.
Daliman is referring to the biennial budget the Ohio General Assembly passed in July that assigns a higher peer group designation to Mahoning and Stark counties. However, Trumbull County remains classified in the third peer group, which commands a lower reimbursement of Medicaid dollars.
“It helps the area, so we’re grateful to the governor [John Kasich] and the Ohio Health Care Association,” he says. “Now, we’d like to start petitioning about Trumbull.”
The General Assembly passed legislation in 2005 that set a new formula to calculate Medicaid reimbursements across the state. Under the new law, the state reduced the number of “peer” groups to three from four. These groups – usually clustered geographically – are used to determine the level of reimbursement per bed to skilled-nursing centers.
Before 2005, Mahoning and Trumbull counties were classified as part of a smaller “urban” peer group allocated a specific amount of Medicaid dollars per bed. But the law eliminated the smaller urban group and instead designated the two counties as part of the lower “rural” peer group. That reduced state reimbursements to skilled nursing centers in those counties.
Four years ago, an advocacy group that represented a coalition of nursing homes filed a lawsuit in Mahoning County Common Pleas Court challenging the law. The group withdrew its complaint a year later.
“We ended up dropping the lawsuit a couple of years ago and began working through our trade association in Columbus on the last budget,” Daliman explains.
The cuts took effect in 2010 and were to be phased in over three years. They could have cost the Valley’s nursing home industry as much as $20 million annually when fully implemented, Daliman said when the suit was filed.
Over the last three years, Daliman and others worked through the Ohio Health Care Association, which lobbied on behalf of these regions to have them reclassified to “urban” peer status.
“The argument we made was that Mahoning and Stark are the sixth- and seventh-largest counties in the state,” the counsel says. The outcome and reclassification in the latest budget, he notes, essentially confirm that argument. Yet the state felt that Trumbull County didn’t meet the criteria to readjust its peer status.
Under the 2005 law, Cincinnati and most of Hamilton County commands the sole designation of the first peer group, Daliman notes, while counties such as Cuyahoga, Franklin and Summit counties are in the second peer group. Until the last budget, Mahoning and Stark were part of peer group three.
“There’s a 30% difference in reimbursement between peer group one and peer group three,” Daliman reports, while there is a 15% difference between the first and second peer groups.
This new reimbursement schedule helps companies such as Windsor House, which has a substantial presence in Mahoning County. “We have 468 beds in Mahoning” and about 500 employees, Daliman reports.
“We’re one of the largest in Trumbull as well,” he adds, noting his company employs 400 at its facilities there and manages 330 beds. “We hope they see fit to help us with Trumbull County,” he says. We’re trying to do the best we can with the monies that come in.”
The reassessment stands to help the nursing home service sector across the Mahoning County, confirms Gary Weiss, executive director of Heritage Manor and Levy Gardens, a skilled nursing and assisted living center in Youngstown.
“The Legislature and the governor heard our plea,” Weiss remarks. “It’s been a major concern for us over the last eight years or so.”
Weiss says the changes would benefit some 40 nursing homes and thousands of employees throughout Mahoning County.
For nonprofit skilled-nursing centers such as Heritage Manor and Levy Gardens, the new reimbursement schedule helps bring these operations closer to cost, Weiss says. “We’re not quite there yet, but it helps.”
Before the latest change, Weiss reports Medicaid reimbursements stood at $161 per bed per day. “With the new annual case mix cost and the new classification, it went to $177,” he says. “It was a major, positive move on the part of the governor.”
Weiss says the reclassification of Mahoning County into the urban peer group comes when skilled-nursing centers are struggling to keep up with other regulations and mandates Medicaid doesn’t cover.
Moreover, the acuity level in Mahoning County is just as high as those in Cuyahoga or Summit counties, so a reassessment of Mahoning County’s status was only fair.
“It’s certainly helped our direct care costs for nursing and rehab services,” Weiss says. “It’s more reflective of what we do. The acuity level here is high, and this has helped the nursing home service sector provide better care and resources for the elderly.”
Editor's Note: First published in the MidNovember edition of The Business Journal.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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