County nursing homes still facing deficits

Though New Hampshire's county nursing homes were able to trim their budget deficit by half last year, that accomplishment may prove to be transitory according to Christopher Boothby, Belknap County Commissioner and President of the New Hampshire Association of Counties.

"We're really going to have to work to protect the gains we've made," Boothby said yesterday following the release by the county association of a report on the progress that's been made in reducing deficits and the outlook for the next few years. "We're facing a risk of moving backwards, to deficits in the $38 million range."

Last year's improvement was achieved thanks to a net gain realized through the imposition of a six percent "bed tax" or provider fee on the state's nursing homes, a ProShare Medicaid program meant to fund publicly owned facilities the difference between higher Medicare rates and lower Medicaid rates, and a Prescription Drug Rebate program. Combined, the three programs generated sufficient revenue to trim the nursing home deficit from $37 million in 2003 to $17.4 million in 2004.

But with the Bush Administration proposing major cuts in Medicaid funding, and with the ProShare program projected to shrink, Boothby said that states and counties are facing some tough financial challenges.

Noting that Belknap County's share of last year's deficit amounted to $665,381, which had to be picked up by local property taxpayers, Boothby indicated that the situation will worsen unless the state begins to live up to its obligation.

Under current law, the federal government is obligated to cover fifty percent of the cost of Medicaid patients at the county nursing homes, with the state required to fund 25 percent and the remaining 25 percent to be picked up by the counties. However, the state has been failing to provide its share, having frozen funding at $181 million — a figure that has not increased in five years.

That fixed level of funding not only shortchanges the county nursing homes by denying them the revenue the state is required — but neglects to pay, it also robs the nursing homes of federal matching dollars.

In Belknap County, for instance, the allowable per diem Medicaid reimbursement per patient in the nursing home is $196.56, but because of the matching nature of funding, the amount the county's nursing home actually received last year was only $138.63 per diem. That $57.93 per day, per patient shortfall results from the state refusing to pay its obligation, which reduces the amount the federal government pays.

According to Boothby, that loss of federal money is costing local taxpayers twice — they're having to make up both the state's shortfall and the loss in federal funding because of the state's shortfall. From a purely financial standpoint, Boothby insists that taxpayers would benefit significantly if the state would pick up its share, thereby boosting the federal contribution.

Getting to that point, the commissioner acknowledges, means working closely with both the executive and legislative branches of the state government. "We can only solve this by working together," Boothby said, indicating that there has been a willingness on the part of both branches to engage in an ongoing dialogue with the counties.

The alternative to the state coming up with an acceptable solution, he suggested, could be for the counties to not renew their agreement with the state over funding, and in essence dump the entire mess and its cost on the state. "The agreement runs out in July," Boothby said. "So we are operating on a deadline."