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Appropriations committee reviews $21 million proposal for nursing-home emergency relief amid concerns about rate-setting and staffing costs
Summary
Committee members discussed a proposed $21 million appropriation to provide emergency financial relief to nursing homes, citing occupancy declines, rate-setting limits that disallow some costs, and sharply higher contract/staffing costs as drivers of industry distress.
The House Appropriations Committee on Jan. 28 discussed a $21 million request in the budget adjustment to provide extraordinary financial relief to nursing homes, and committee members asked for language tying relief to oversight and a plan for improvement.
David (committee member) described the drivers behind the request: occupancy reductions during the pandemic and a rate-setting system that caps reimbursement for certain administrative and clinical costs at peer-median levels. “If your costs were above the median, you didn't get recognized—those were disallowed,” he said, explaining how facilities with higher-than-median administrative or clinical costs could face unreimbursed expenses.
Committee members also cited sharply higher temporary staffing costs, including millions spent on traveling nurses, and outdated rate bases that do not reflect current costs. Members noted that last year roughly half the industry received assistance and that projections show substantially higher bed-day utilization than anticipated; one line item discussed in the transcript reflected 77,000 increased bed days at a rate cited around $315 per day.
Several members said language should accompany any appropriation to require a plan for fiscal oversight and performance improvement. Lynn (committee member) and others described the funding need as a chronic system issue tied to Medicaid reimbursement mixes and lack of alternative revenue streams.
No formal vote was recorded in the transcript for the $21 million; members indicated agreement to accept the proposal in principle pending final language and further vetting by human services and the committee.
