My Cart - Thursday, July 29, 2010

In the Proposed 2010-2011 Governor's budget, Nursing Facilities fare better than expected

Published 10-Feb-2010 by Brian Stever in Latest News

The Governor described the budget as essentially status quo budget with the exception of increases in mandated programs and public education. He also noted that the single largest budget increase in the proposed budget is for Medical Assistance. Funding for the MA Long-Term Living line item, which includes nursing facilities, saw an increase. Per discussions with Secretary of Aging Mike Hall and staff at the annual post-budget briefing held by DPW, Aging, and Insurance, the increase in the MA LTL line item includes $24million to pay for increased acuity in nursing facility residents AND a very limited number of MA funded Assisted Living Waiver ‘slots’ given the time the Department will need to license AL residences (January1, 2011 at the earliest) and get the waiver approved by CMS.

Used from a PANPHA Knowledge Central email dated 2/10/10;

Governor Announces 2010-2011 State Budget and Nursing Facility Reimbursement fares better than most

2010-11 Budget: Overview

OVERALL STATE BUDGET

The Governor’s proposed 2010-11 budget calls for $66.4 billion in total spending. If the American Recovery and Reinvestment Act (ARRA) funds are included for both years, the 2010-11 General Fund total of $29 billion is a 4.1 percent increase over the 2009-10 General Fund budget.

$26.3 Billion State General Fund \r\n
$2.8 Billion ARRA budgetary relief to General Fund \r\n
$23.0 Billion in Federal Funds \r\n
$2.7 Billion in Motor License Fund dollars \r\n
$1.6 Billion in Lottery Fund dollars \r\n
$1.8 Billion in Augmentations and Fees \r\n
$0.4 Billion in Tobacco Settlement Fund dollars \r\n
$8.2 Billion from all other funds (Racing Fund, Fish and Game Funds, etc.)

The Long Term Care appropriation, which includes both nursing homes and home and community-based services for older Pennsylvanians, would receive an increase of only $19 million or 3 percent in state general funds, but larger increases from federal funds and ARRA. The budget includes $6.2 million to provide an additional 1,692 older Pennsylvanians with home and community-based service and $24 million to allow for increased acuity of nursing facility residents. The budget provides funding for OLTL to conduct a comprehensive review of the rei mbursement method for nursing facilities. OLTL also anticipates that it will be able to continue working with nursing facilities to redesign and right-size their programs and facilities.

The budget includes $11.1 million to provide services to 1,524 additional adults with disabilities.

Of interest, the proposed budget includes $724,000 to implement assisted living regulations, some of which the Department hopes to use on a minimal number of Assisted Living Waiver Slots to provide financial support for assisted living residents.

$9.3 million is proposed to continue to support and increase the LIFE program, Pennsylvania’s Program of all-inclusive care for the elderly.

The state supplement to Supplemental Security Income (SSI) was decreased by $5 per month during the 2009-10 freeze and this reduced level of funding is continued in the proposed budget.

The budget anticipates expanding the PACE program, which provides prescription drugs to older low-income Pennsylvanians, to 4,000 additional seniors in 2010-11.

This budget proposes to combine the Department of Aging and the Office of Long Term Living (OLTL) into one Department of Aging and Long Term Living.

Yesterday, Governor Ed Rendell announced his proposed 2010-11 budget to a joint session of the legislature. The Governor described the budget as essentially as status quo budget with the exception of increases in mandated programs and public education. He also noted that the single largest budget increase in the proposed budget is for Medical Assistance. Funding for the MA Long-Term Living line item, which includes nursing facilities, saw an increase. Per discussions with Secretary of Aging Mike Hall and staff at the annual post-budget briefing held by DPW, Aging, and Insurance, the increase in the MA LTL line item includes $24million to pay for increased acuity in nursing facility residents AND a very limited number of MA funded Assisted Living Waiver ‘slots’ given the time the Department will need to license AL residences (January1, 2011 at the earliest) and get the waiver approved by CMS.

The Governor stressed that the General Fund budget does not rely on any broad-based tax increases for this fiscal year, although he did outline a proposal to fund a Stimulus Transition Reserve Fund intended to address future concerns. The proposed fund would benefit from proceeds of taxing gas extracted from the Marcellus Shale; new taxes on cigars and smokeless tobacco; eliminating most exemptions to the state sales tax while reducing the rate from 6% to 4% (food, clothing and prescription drugs would remain exempt from sales tax under the Governor’s proposal); and make changes to the corporate net income tax to include companies located outside Pennsylvania that have a substantial Pennsylvania presence. The purpose of the fu nd would be to address the loss of federal stimulus funding beginning July 2011 and, shortly thereafter, the impact of the 2001 pension increase legislation.

The Governor called attention to three major assumptions made in drafting the budget. First, the economy is expected to stabilize; second, the budget anticipates that the federal government will pass the Smart Pharmacy plan that will increase the state’s ability to cut Medicaid pharmacy costs; and finally, the budget assumes that Congress passes the President’s proposal to extend fiscal relief in the form of enhanced federal match for the Medical Assistance program, which adds about $800 million to the Commonwealth’s budget. If any of these assumptions are incorrect, tax increases or deep program cuts will need to be considered.

Attached below is a brief overview of the Governor’s proposed budget.