Nevada governor raises reimbursement rates to keep nursing homes open

CARSON CITY - Nevada, with the nation's highest rate of bankrupt nursing homes, is raising Medicaid payments to the homes to help ensure they're not forced to close their doors to the elderly and disabled.

A 7 percent Medicaid rate hike for the homes, retroactive to July 1999, plus added slack for the homes in submitting bills for reimbursements were announced Tuesday by Gov. Kenny Guinn.

"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 in our state," the governor said.

"This retroactive rate increase is warranted and necessary to protect the industry's financial condition."

The rate change, along with extra time for homes to submit bills and a 2.3 percent reimbursement rate hike for hospitals, will add nearly $19 million to state and federal spending on Medicaid reimbursements in the current two-year budget cycle, which ends in June 2001.

Tammy Supchak, head of the Nevada Health Care Association, said the rate increase is the first in three years for the homes and "will provide us the necessary funds to provide the quality of care our residents deserve."

Supchak had warned lawmakers earlier about the industry's developing crisis. After that, Guinn asked her and other industry representatives to meet with him to talk about solutions. That meeting occurred three weeks ago.

Guinn said the additional cost can be covered by unspent Medicaid dollars - half state and half federal money - and by expected general surplus funds. He said he wouldn't need legislative authorization for the immediate spending, but would ask the 2001 Legislature for additional funds for more increases in the coming two-year budget cycle.

The governor also said that something had to be done promptly because Nevada's senior population is growing and the nursing home industry must remain healthy to handle that growth.

In addition to improvements in Medicaid funding, the nursing home industry is asking Congress to restore federal Medicare funding that was slashed for a wide range of health care programs when Congress approved the Balanced Budget Act of 1997.

The Associated Press reported in April that 22 of 47 long-term care facilities in Nevada had gone bankrupt, for a 47 percent rate. New Mexico has the same rate, and the two states have been repeatedly mentioned by proponents of increased federal and state funding for the homes.

Nevada's high rate was due mainly to the February bankruptcy filing by Integrated Health Services Inc., which has 400 homes around the nation. The Sparks, Md.-based company owns 15 of the 22 Nevada homes now under Chapter 11 bankruptcy protection.

More than 1,600 of the nation's 17,000 nursing homes have filed for bankruptcy since last fall as they struggle with funding hassles, increased insurance costs and tougher quality-care standards.

For some, the bankruptcy filings resulted from bad business decisions, heavy debt loads and claims of defrauding government health care programs.

At least one Nevada nursing home, in Gardnerville, went broke and closed last year, forcing residents to find new homes. That mirrored a pattern around the country, although most of the homes in bankruptcy proceedings have been able to remain open.

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