Guinn orders 7.6 percent rate hike for nursing homes

CARSON CITY -- Jim Toomey, owner of the El Jen Convalescent & Retirement Center in Las Vegas, says he will be able to keep his doors open because of a raise in state rates ordered by Gov. Kenny Guinn Tuesday.

Guinn directed rates be increased to the 37 nursing homes in Nevada by 7.6 percent to keep senior citizens and the disabled from being evicted because of possible closures.

In addition, the governor ordered rates raised by 2.5 percent to hospitals in their treatment of Medicaid patients. The increase is retroactive in both cases to July 1, 1999.

"I felt it was important to act right away, before a nursing home crisis developed that could have impacted hundreds of elderly and disabled Nevadans," he said. The increases will cost more than $16 million over a two-year period, half of it from the state and the rest from the federal government.

Toomey, who has operated a nursing home since 1973, said the state's Medicaid rate for patients is short $24 a day. The state pays an average of $103 a day for skilled nursing home care. Toomey says he collects from $120 to $150 a day from private patients, which tends to subsidize the Medicaid clients.

The new average state rate for skilled nursing care will go to $110 a day.

Tammy Supchak, president of the Nevada Health Care Association, said the increase "will significantly affect the ability of Nevada's nursing homes to provide the high level quality of care the citizens of our state deserve."

There were comments from industry officials at a legislative meeting earlier this year that some nursing homes might have to close, forcing hundreds of patients out on the street.

About 37 percent of the 4,904 certified nursing home beds in Nevada are owned by two companies that are in bankruptcy, state officials said. And the state is paying through Medicaid for about 60 percent of the beds now in use at a cost to Medicaid of more than $80 million.

The governor said Nevada has to make sure there is enough housing for Nevada's elderly and to encourage construction of additional facilities to take care the growing population.

Supchak said she did not think there were going to be any evictions but added this raise will definitely help the financially strapped homes. The last increase by the state was in July 1998 for 1.8 percent.

The 7 percent for the nursing homes will cost an annual $6.4 million. The cost for the rate increase for hospitals is $1.8 million a year.

The governor also has extended the time for nursing homes to submit their bills and for them to be paid. There has been a 120-day limit. If the state found mistakes in the billing, it was returned to the nursing home. But the process had to be completed within that deadline or the business was not paid. Guinn extended that to 180 days.

Nursing home operators said the 120 days was one of the shortest deadlines of any state in the nation.

The increase in payments will cost taxpayers anywhere from $1.9 million to $2.6 million. The money to finance the increases will come from savings in the Medicaid budget. Guinn said next year he will decide whether to recommend another rate increase.

Guinn called the industry leaders several weeks ago and started the negotiations for the rate increase. "We spoke frankly about their actual operating costs and the level of care they provide," he said.

"This retroactive rate increase is warranted and necessary to protect the industry's financial condition," the governor said. It is better to do it now than to wait until the 2001 Legislature, he said.

He said he does not need legislative approval for this rate increase.

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