Lawmakers aim to help struggling nursing homes

Lawmakers aim to help struggling nursing homes

Updated May 23

Nursing homes in Texas on average have to cover a gap of nearly $20 per day to take care of residents who pay with Medicaid, but a bill before the state Legislature seeks to close that gap with the help of federal funding.

House Bill 2766, filed by Rep. J.D. Sheffield, R-Gatesville, was voted out of the Texas House of Representatives by a margin of 96-42 on May 10 and sent to the Senate. As of May 23, the bill had been voted out of the Senate Committee on Health and Human Services 6-3.

Proponents said the bill would bring in about $440 million in federal funding per biennium to be distributed across the state’s 1,200 nursing homes at no cost to the state. This money could help nursing homes afford much-needed capital projects and combat high staff turnover rates, Sheffield said.

“HB 2766 would help nursing home owners retain good staff, and that will improve the quality of care more than any other thing I can think of,” he said.

The most recent data collected by the American Health Care Association in 2014—a trade association representing about 500 nursing homes in Texas through the Texas Health Care Association—show providers in Texas spend an average of $157.84 per day caring for Medicaid residents. About $138.37 of that was reimbursed by Medicaid coverage, resulting in a $19.47 gap. HB 2766 could close that gap to around $1, THCA officials said.

However, the bill has garnered opposition from private pay nursing homes—which do not accept payments through Medicaid—which have expressed concern that they would end up paying into the system without receiving a benefit.

How it works


HB 2766 proposes taking advantage of a federal program by creating a Nursing Facilities Reinvestment Allowance paid by nursing homes based on their revenue. Through a self-assessed fee, nursing homes across the state would each contribute about 6 percent of revenue—an estimated $375 million in total—to a state trust fund. The state would use the funds to draw down matching dollars from the federal government through the Centers for Medicare & Medicaid Services.

The money paid in fees would be distributed back to the nursing homes dollar-per-dollar, officials said. THCA, which worked with legislators on crafting the bill, estimates a total of $440 million in new dollars from the federal government would be left over and available to distribute to nursing homes. Those funds would be split, with half going toward improving Medicaid rates and half going toward improving resident care based on a CMS five-star rating program.

Texas is one of six states in the U.S. that does not take advantage of this program, said Eddie Parades, vice president of government affairs with StoneGate Senior Living and a member of the THCA who helped craft the bill.

About 85 percent of the 120,000 nursing home residents in Texas are on Medicaid, Parades said. Without the influx of federal funds or a rate increase from the state, long-term care providers that rely on Medicaid reimbursements will quickly be in a crisis, he said.

“We are on razor-thin margins,” he said. “If we don’t get a rate increase this year, there will no doubt be nursing home closings in Texas. Nursing homes will start closing in rural markets first.”

The effects of the low reimbursement rate can be seen in Cy-Fair. Kirby Green, who operates Park Manor of Cy-Fair—a skilled nursing facility with 101 residents, including 63 on Medicaid—said he does everything he can to make sure his staff is recognized and appreciated but is often left simply hoping they do not choose to pursue other work.

“You can be doing all these great things to retain your staff, but ultimately if they cannot support their families, you’ll have them moving on for 50 cents more [or] a dollar more [per hour],” he said. “These are the [certified nursing assistants], the face of the community, the ones providing direct care and interacting with families. It’s extremely frustrating when you cannot pay them what they deserve.”

Opponents raise questions


Similar bills have been filed in past legislative sessions but fell short because of fears that such a system would disadvantage nursing homes that have few or no Medicaid patients.

Officials behind HB 2766 said these low-Medicaid facilities would be made whole, meaning they would not shoulder any financial burden. Part of the process involves creating a nonprofit corporation that allows high-Medicaid homes to offset the cost of the program for low-Medicaid homes through voluntary payments from participating high-Medicaid facilities. About 90 percent of high-Medicaid nursing homes said they would be willing to participate, officials said.

However, the CMS program these bills takes advantage of does not allow any mechanisms that would guarantee private pay nursing homes their money back, so the establishment of the nonprofit cannot be included in the language of the proposed bill.

Opponents expressed skepticism that private pay residents would not be harmed.

“We have concerns about the unwritten portions of this bill and the private arrangement that falls outside the statute,” said George Linial with LeadingAge Texas, a trade association that advocates for nonprofit retirement communities and nursing homes. “The bill guarantees that someone will have to pay a tax, and there’s nothing in the statute that protects pay communities or residents from this tax.”

Paredes said there will be a binding legal contract in place that will make sure low-Medicaid facilities get their money back first. Sheffield ensured the costs paid by low- and no-Medicaid providers would be offset.

“It’s a smart way to improve long-term care and avoid using state revenue,” he said. “It’s also the only viable plan on the table right now.”
By Shawn Arrajj
Shawn Arrajj serves as the editor of the Cy-Fair edition of Community Impact Newspaper where he covers the Cy-Fair and Jersey Village communities. He mainly writes about development, transportation and issues in Harris County.


MOST RECENT

As part of President Joe Biden’s plan to reopen schools safely nationwide, the department’s National School Lunch Program Seamless Summer Option is being expanded beyond the summertime. (Courtesy Adobe Stock)
USDA extends free school meals provision through 2021-22 school year

Schools nationwide will be able to serve nutritious meals to all students free of charge regardless of eligibility through June 30, 2022, officials announced.

Desert Industries opened April 15. (Courtesy Desert Industries)
Deseret Industries thrift store now open on FM 1960 in Cy-Fair

The new store opened last week with clothing, home goods and more.

Hurricane Harvey hit the Houston region in 2017. (Vanessa Holt/Community Impact Newspaper)
How Harris County residents can prepare for hurricane season

After the most active hurricane season on record in 2020, Harris County officials said residents should be prepared for the upcoming season starting June 1.

More than 385,600 vaccine doses have been administered in the Cy-Fair area. (Sandra Sadek/Community Impact Newspaper)
22% of Cy-Fair residents fully vaccinated against COVID-19

As of April 19, about 385,600 doses of COVID-19 vaccines have been distributed to individuals across the 10 ZIP codes within Cy-Fair ISD’s boundaries, according to the Texas Department of State Health Services.

Harris County Judge Lina Hidalgo speaks at an April 19 press conference at a mass-vaccination site at NRG Park. (Screenshot courtesy Facebook Live).
Harris County accepting walk-ins for vaccine at NRG Park

As demand for vaccines has fallen, officials are looking for ways to make them more accessible.

Cy-Fair ISD's mask mandate is set to end June 7. (Courtesy Cy-Fair ISD)
End in sight for Cy-Fair ISD's mask mandate, future of virtual learning still uncertain

Superintendent Mark Henry released a statement about the future of the district's mask mandate and virtual learning option.

More COVID-19 cases were confirmed last week in Cy-Fair ISD. (Courtesy Cy-Fair ISD)
78 COVID-19 cases confirmed in Cy-Fair ISD schools April 12-18

The district saw about a 9% decrease in new cases confirmed over the previous week.

Early voting runs April 19-27 with the election on May 1. (Community Impact Newspaper staff)
See what is on the ballot for May 1 elections in Cy-Fair

April 19 marks the first day of early voting for May 1 elections.

Vaccinations at any of Kelsey-Seybold Clinic's 26 Greater Houston-area locations are available Monday through Friday from 8 a.m.-5 p.m. by appointment only at no cost to the individual or family. (Courtesy Adobe Stock)
Houston-based Kelsey-Seybold Clinic expands vaccine eligibility to age 16 and older

Vaccinations at any of Kelsey-Seybold Clinic's 26 Greater Houston-area locations are available Monday through Friday from 8 a.m.-5 p.m. by appointment only at no cost to the individual or family.

Harris County residents seeking a COVID-19 vaccine will no longer be required to sign up for a waitlist effective immediately. (Courtesy Texas Children’s Hospital)
COVID-19 vaccines now available on demand in Harris County

The announcement comes as officials say vaccine demand is falling and will soon be in line with supply for the first time.

Customers can find baked goods and more at The Chef's Bag. (Courtesy The Chef's Bag)
The Chef’s Bag market now offering locally made products in Cy-Fair

Chefs Jennifer Burnett and Kevin Mason recently opened a market where community members can purchase products made by local chefs.

Costco Business Centers, of which there are only about 15 in the country, carry different products and provide a different shopping experience to members than do traditional Costco Wholesale stores. (Courtesy Costco Wholesale)
Costco Business Center being built in Stafford; see live music in The Woodlands and more top Houston-area news

Read the top business and community news from the Houston area from the past week.