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As assisted living providers struggle to provide services to Medicaid home- and community-based services beneficiaries, industry leaders from two states are asking lawmakers to bump up reimbursement rates or face the loss of provider participation.

Following the closure of 29 assisted living communities and nursing homes in the past three years, Nebraska’s long-term care experts are warning of “care deserts” due in part to low Medicaid reimbursement rates.

The industry is backing two proposed bills, LB 941 and LB 942, that would increase Medicaid reimbursements rates in assisted living communities and skilled nursing facilities. The two bills combined target $12.2 million in general fund dollars, along with a $17.2 million federal match, to increase those rates.

State provider groups said that the increased funding is “vital” to older adults.

“It is becoming increasingly difficult to find a Medicaid assisted living placement in Nebraska,” LeadingAge Nebraska CEO Kierstin Reed told McKnight’s Senior Living. “As the requirements for providing Medicaid waiver services have increased, the payment has not kept up with the cost of services. In order to meet financial obligations, providers have had to limit the number of Medicaid-funded residents they will accept to their community.”

The Nebraska Department of Health and Human Services completed a rate study of all home- and community-based Medicaid waiver services in 2022, and it showed that assisted living service was the same across all service delivery areas, including urban and rural settings. The study recommended equalizing the payment for those served, at $78.45 per day, the same increase called for in the bills, which would result in an increase of almost $5 daily for urban providers and $18 for rural providers. 

“Based on feedback from our membership, this rate increase would go a long way to support the services being provided and covering the cost of care, particularly in the rural areas,” Reed said, adding that a $20-per-day increase during the public health emergency came closer to covering costs. 

The Nebraska Health Care Association recently called attention to the importance of access to care in assisted living communities and nursing homes. The industry group hosted a press conference at the Nebraska State Capitol to highlight those geographic care deserts in the state, how long-term care providers are addressing workforce challenges, and how facility closures affect quality of life for residents, family members and staff members.

According to NHCA President and CEO Jalene Carpenter, 15 Nebraska counties have no assisted living communities or nursing homes, creating care deserts, with several more counties just one closure away from joining those care deserts. 

“A tight labor market; soaring cost of goods, services and labor; and long-term underfunding for services provided is causing access to care in a Nebraska nursing home or assisted living facility to become increasingly limited,” Carpenter told McKnight’s Senior Living. “It is important that all Nebraskans have access to the right level of care, when and where they need it.”

Those challenges, Carpenter said, are forcing assisted living communities and nursing homes to limit admissions or close, hospitals to become backlogged, and older adults to travel vast distances to receive care or visit family members receiving care. Some staff members, she added, are driving hundreds of miles to work each day in the nearest long-term care facility.

Arkansas’ Medicaid rate plight

Meanwhile, Arkansas’ assisted living industry similarly pleaded with state officials to increase Medicaid reimbursement rates.

During a recent Arkansas Legislative Council-Hospital and Medicaid Study Subcommittee hearing, the Arkansas Residential Assisted Living Association told lawmakers that the current Medicaid reimbursement is “not sustainable.” 

A Kansas City, MO-based accounting firm, Myers and Stauffer, completed a report based on the Arkansas Department of Human Services’ Living Choices Assisted Living Waiver Rate Study, which was updated last year.

According to the rate study, daily Medicaid rates paid to long-term care facilities increased in March 2022 from $67.25 per resident to $81.59. Rural facilities saw an extra 5% bump, bringing their daily resident rate to $85.67. The report recommendations included four different daily Medicaid reimbursement rate scenarios beginning in fiscal year 2025, ranging from $84.17 to $86.73.

Providers testified that Medicaid rates have not kept pace with inflation and could lead to providers abandoning the program. ARALA Executive Director Phyllis Bell said that the number of communities participating in the state’s Living Choices Assisted Living program fell from 61 in 2018 to 51 as of June.

“If a sustainable rate determination process is not implemented encouraging provider participation, access will continue to decrease for Medicaid-eligible elderly and disabled individuals, including disadvantaged and minority populations, making the situation worse — not better — for those who need assistance with daily living activities” Bell told McKnight’s Senior Living. “

Bell pointed to the impending closure of St. Francis Assisted Living as a consequence of low Medicaid reimbursement rates.

“Vulnerable Arkansans, especially those in high poverty and minority communities, continue to be forced into expensive institutional facilities,” Bell said. “Access to quality-of-life choices, which encourages independence, must become a priority for the Arkansas Medicaid Living Choices Assisted Living waiver program for it to be sustainable.”

The public comment period for the report ends Friday.