IN-DEPTH: Proposed changes to nursing home reimbursement leaves Minnesota facilities in limbo

May 16, 2019 08:54 PM

As budget negotiations continue at the State Capitol, millions of dollars in funding for nursing homes and assisted living centers is up in the air.

Gov. Tim Walz's proposal includes a $68 million cut in reimbursements for elder care facilities. The change would happen over four years.

RELATED: Governor, top lawmakers still trying to wrap up budget deal

DFL lawmakers argue that increased spending in recent years has not improved the quality of care facilities. But industry professionals say the cuts could have devastating impacts, especially on rural areas.

"We literally have to go back in now and take out costs that we have spent over the last 18 months," said Howie Groff, president of Tealwood Senior Living.

Groff said because of how the system is set up, facilities have already spent this money. Many put the increases toward wages, benefits and infrastructure improvements, then wait to be reimbursed by the state.

"At a time we need to be dedicating more resources to improving quality care, we're going to see a cut in payments," Groff said.

He said rural communities could be hit especially hard.

"We're already facing a crisis," Groff said. "We're short nurses. We're short certified nursing assistants. It makes for basically an equation you can't solve."

Republican legislators have pushed back against the proposal, saying it counteracts spending increases passed into law in 2015.

"We wanted to make sure that nursing homes had to ability to use that money in the best way to provide the best care for their residents," said Rep. Kurt Daudt, the Republican House Minority Leader.

But on the other side of the aisle, lawmakers said reimbursement rates went to administrative costs and ultimately did not help quality improve.

"We saw an increase, but not an increase in quality" said Rep. Jen Schultz, DFL-Duluth.

Schultz said the proposed changes are meant as an evaluation of the reimbursement program.

"It's not a cut, because what we're doing is just changing the growth rate," Schultz said.

While the proposal is on the table in conference committee, Schultz said it could play a role in the closed-door negotiations happening with leaders on both sides.

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Kirsten Swanson

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