State officials to move ahead with plan to slice $7 million from nursing homes

Last modified: 1/26/2015 12:37:34 AM
A plan to patch a $58 million hole in the Department of Health and Human Services budget drew fire from legislators Friday who said $7 million in cuts to nursing home payments would target some of the state’s most vulnerable residents.

“We’re making a decision to kick out people’s grandparents into the street,” said Sen. Andy Sanborn, a Bedford Republican. “We have got to find a different way to satisfy this shortfall.”

DHHS outlined its budget reduction plan during a tense meeting before the joint legislative fiscal committee where lawmakers grilled Commissioner Nick Toumpas on the department’s decision — signed off on by Gov. Maggie Hassan — to reduce state Medicaid rate payments to nursing homes.

“I know of no situation where someone has been ‘put out on the street’ because of this,” Toumpas said. “We don’t have a whole lot of options.”

Each year, DHHS provides rate reimbursements to nursing homes in New Hampshire with residents on Medicaid. Any money the state budgets to pay those rates, but is left unspent at the end of the year, is supposed to be rolled into the next year’s payments.

It’s those funds, amounting to roughly $7 million between 2014 and 2015, that the department is targeting and drew the most pushback out of the $45 million reduction plan.

Nursing Home officials said they had been expecting to receive those funds, and the cut will have a big impact on their bottoms lines.

Merrimack County Nursing Home, a public facility in Boscawen supported in part by county tax dollars, is expecting a budget hit to the tune of $450,000 to $500,000, said Administrator Lori Shibinette.

The nursing home’s fiscal year began Jan. 1, and Medicaid payments are a large revenue stream, given 85 percent of the facility’s residents are on the health program. The loss, Shibinette said, could translate to increased taxes on Merrimack County constituents. “I have no other way to make it up,” she said.

Hillsborough County Nursing Home Administrator Bruce Moorehead, who oversees the facility in Goffstown, said he anticipates a loss of roughly $300,000. “My worry is facilities that have high percentages of Medicaid patients, which a lot of us do, are going to be hit hard,” he said.

The reductions in state payments to public nursing homes will be partly made-up by federal dollars, supplemental Medicaid payments known as “pro-share payments,” Toumpas said.

But that won’t make up the entire reduction and given the timing, Shibinette said, those additional payments likely won’t be paid out to public nursing homes until next year.

The pro-share payments are not available for private nursing homes with residents on Medicaid.

The result of the reduction on those private facilities, could turn into a choice between raising rates for non-Medicaid residents or cutting staff, said John Poirier, President of the New Hampshire Healthcare Association, who represents private nursing homes in the state.

“There are number of nursing homes and assisted living facilities in New Hampshire that are very close to the edge,” Poirier said. “Depending on the facility and timing of this... it could put them in very seriously financial difficulties.”

The Department of Health and Human Services is projecting a $58 million budget shortfall -- based on November figures -- it says is driven from an increase in Medicaid caseloads, delays in the implementation of the state’s Medicaid care management program, legal costs associated with a mental health lawsuit and administrative costs related to the state’s Medicaid expansion.

The department’s reduction plan, including the $7 million reduction to nursing home payments, aims to close that budget gap by the end of the fiscal year on June 30.

“We are holding positions vacant, we have trimmed from every other area,” Toumpas said Friday. “We don’t have a lot of options.”

Hassan reiterated that message Friday, saying reductions may be hard, but they are needed.

“The Department of Health and Human Services’ plan for balancing its budget is fiscally responsible and another important step in ensuring a balanced budget for Fiscal Year 2015,” she said in a statement. “These are difficult, but necessary, actions to maintain a balanced budget.”

The department did not seek approval from the fiscal committee to move forward with its plan. Based on consultation with the Attorney General’s office, Toumpas said, the department believes it has authority make the reductions without legislative approval. Lawmakers questioned that decision and plan to speak with the Attorney General separately.



(Allie Morris can be reached at 369-3307 or amorris@cmonitor.com.)


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