Politics & Government

Senate panel OKs compromise on nursing bed tax

TOPEKA — A compromise plan to levy a fee on nursing home beds won approval Thursday in a Senate panel.

The fee is intended to offset Medicaid cuts for Kansas nursing homes.

The original plan called for all nursing facilities in Kansas to pay a $1,325 annual fee for each licensed bed. That money, about $30 million to start, would go into a fund and be used to draw an estimated $57 million more in federal matching Medicaid dollars.

Some in the industry said the proposal was essentially a tax on elderly people who had saved their money and were paying for their own care privately.

The compromise, which now goes to the full Senate for debate, would create two payment tiers. Most facilities would pay $1,950 per licensed bed. Nursing care facilities that are part of a continuing care retirement facility, small skilled-nursing care facilities and facilities with high numbers of Medicaid patients would pay up to about $330.

"I think it is a program that would work going forward in our state," said Martin Kennedy, secretary of the Kansas Department on Aging.

Some tout the idea as a way to bring more money into the system without raising taxes. Although expenses for nursing homes have increased, the amount the state pays for Medicaid patients has not. The state decreased rate payments by 10 percent starting Jan. 1.

The money would still go into the fund to help draw more federal Medicaid dollars. The program, which offers health care coverage for low-income people, is paid for by federal and state money.

Facilities with residents who rely on Medicaid would receive higher payments because of the higher federal match. Homes that have only residents who pay privately would not receive any money back for those patients.

"This is about bringing $57 million back to the state of Kansas. This does not use state general funds to do that," said Cindy Luxem, CEO of the Kansas Health Care Association. "This is about the retention of jobs and retention of accessibility in the state."

The compromise was built on a similar plan developed in Iowa. It requires a waiver from the Centers for Medicare and Medicaid Services.

Debra Zehr, president of the Kansas Association of Homes and Services for the Aging, said the changes helped soften the blow for some sites that would lose money under the program. Her association had originally opposed the plan.

Despite assurances that the compromise solved prior problems, some lawmakers remained unsure. Sen. Jean Schodorf, R-Wichita, called the measure "tainted" and noted she'd never seen such industry infighting.

Some nursing home owners encouraged residents and families to contact their lawmakers with concerns about the potential that the assessment would turn into a tax on private-pay residents.

"I don't know that we can vote for it now, because the residents aren't going to understand. They have been scared to death," Schodorf said.

Schodorf said she had received letters from the elderly and their families asking why lawmakers were going to force them to pay more and run through their savings quicker.

Zehr said the compromise alleviated the pressure on residents paying for services out of their own pocket as much as possible.