Topeka Operators of nursing homes and assisted living centers in Kansas are deeply divided over a proposal to charge a fee for every bed in their facilities in an effort to attract more federal money.
A bill awaiting legislative action would assess a $1,325 fee per bed in nursing facilities. It would collect an estimated $27 million from nursing facilities, which could be matched by about $62 million in federal dollars.
Supporters say the extra funds would help a system struggling with deep budget cuts, while opponents argue that lawmakers would likely use the money for other purposes to help fill a serious budget gap.
Phyllis Kelly, executive director of the Kansas Adult Care Executives association, said nursing home administrators and assisted living operators generally are united on most issues. But this proposal is so divisive that her organization is not taking a position on it.
“We usually as an industry are very together on the issues related to long-term care, our seniors and our elderly,” Kelly said. “This is one that we definitely have different opinions about.”
Debra Zehr, president and chief executive officer of the Kansas Association of Homes and Services for the Aging, which represents not-for-profit facilities, said she’s been told that lawmakers in other states have used the revenue for other budget purposes.
But Cindy Luxem, CEO of the Kansas Health Care Association, said she doesn’t understand the opposition to the bill.
“I am shocked at the fact that the people that oppose this have scared senior citizens into thinking this is something they will have to pay themselves,” said Luxem, whose organization represents both not-for-profit and for-profit facilities. “There is this dirty secret, the issue about private pay, this is not a new issue for this profession.”
Because nursing facilities operate with tight limits on Medicaid reimbursement, Luxem said, private-pay residents often pay a larger piece of the overall bill. She said the new tax would help reduce that burden by bringing new money into the system.
“We’ve had a secret or a silent granny tax for years,” Luxem said. “That’s what providers do. They make the private pay people make up for those deficiencies.”
Zehr said pressure to implement the fees and use the revenue for other purposes increases during difficult budget times. In fact, she said the House Appropriations Committee budget already proposes taking some of the new money.
“I certainly am not saying there is malicious intent on the part of any legislator,” Zehr said. “It is just what happens over time. In our case, it was 24 hours before the Legislature started to look at how they would spend that money.”
Luxem responded that the bill establishing the fees requires that the program end and money be returned to nursing facilities if the money is diverted for other uses. She noted that the state hasn’t swiped dollars raised by a similar fee for hospitals.
And she said nursing facilities might not get their 10 percent cut in Medicaid reimbursements restored without the new tax.
“I guess I’m being a realist,” she said. “I don’t believe there is any plans out there for any great revenue enhancements to help the great budget crises we are in.”