Texas nursing homes struggle with lack of funding Federal reimbursement dollars failed to pass legislature

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. As a result, nursing home operators have said they often find it challenging to retain quality staff, pay for new equipment and keep facilities up-to-date.

A bill before the state Legislature this session sought to close the gap with the help of federal funding but was unable to pass out of the Texas Senate before the session ended May 29. House Bill 2766 would have brought an estimated $440 million into the state through a federal reinvestment program, which could have been distributed across the state’s 1,200 nursing homes, according to Rep. J.D. Sheffield, R-Gatesville, who filed the legislation.

Nursing homes struggle with lack of fundingHowever, the bill did not pass and now, nursing home officials are worried a crisis could be imminent.

“We are on razor-thin margins,” said Eddie Parades, vice president of government affairs with StoneGate Senior Living and a member of the Texas Health Care Association, which represents 500 nursing homes across the state. “Without a rate increase, there will no doubt be nursing home closings in Texas.”

Nursing homes will start closing in rural markets first, but the effects would eventually spill over into cities like Houston, Paredes said.

“Those [rural] families won’t have long-term care placement and access, so they’ll be diverted to hospitals in nearby cities, which will create a backup,” he said. “We’ll quickly see a crisis in long-term care services.”

About 85 percent of the 120,000 nursing home residents in Texas are on Medicaid. The most recent data collected by the American Health Care Association in 2014 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.

The growth of the reimbursement gap as operating costs continue to rise has resulted in a steady struggle to maintain quality care, Paredes said. In 2015, The Kaiser Family Foundation ranked Texas nursing homes last out of all 50 states and the District of Columbia in terms of quality care compared to other states.

Of the state’s 1,220 nursing homes, 317 were found to have “serious deficiencies,” according to August 2016 data from the U.S. Centers for Medicare and Medicaid Services.

The biggest challenge relates to retaining staff, said Sarah Aho, an administrator with Grace Care Center of Katy. Grace Care Center has 98 total residents, including 40 Medicaid residents.

“Turnover is really high in skilled nursing facilities,” Aho said. “Nursing assistants will leave and go down the street for a job that pays 25 cents more. Most nursing assistants in my area actually work two full-time jobs. It affects quality of care because these people are working 16-hour days, which leads to burnout.”

Officials with the THCA said they are dedicated to continuing the fight to raise the Medicaid reimbursement rate in the next legislative session. Meanwhile, nursing home operators in the Katy area are doing what they can to stay afloat.

Aho said she has to be creative with managing expenses. Still, Aho said having 40 of her 98 residents on Medicaid could be worse; some facilities have 80-90 percent of the residents on Medicaid.

“I would just like to see more legislators look at these nursing homes and what their needs are,” she said. “We want to be sure we provide our elders the best possible care. If you can pay your staff a better salary, you can decrease turnover.”

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