Medicaid Bed Taxes and Institutional Bias.

Medicaid Bed Taxes and Institutional Bias. Information Bulletin #333 (5/20111)

In FY 2010, nearly $13.5 billion dollars were generated in 37 States as Medicaid “Provider Taxes,” a/k/a, Bed Taxes, Fees, and/or Assessments. At a minimum, these bed taxes generated another $13.5 billion federal match and more that States received.

What are Medicaid Bed Taxes and why should advocates for older and disabled Americans care?

37 States levy Medicaid provider/bed taxes against nursing homes (they can also be levied on hospitals or ICF beds). The $13.5 billion broken at the end of this Bulletin does not distinguish among NH, ICF or hospitals.

Often, bed taxes are based on, for example, the total number of nursing home beds in a nursing home. That is, a State requires each nursing home to pay the State a specific amount of money for each nursing home bed per day. We heard recently that one State taxed nursing homes $10 per nursing home bed per day whether or not the bed was even occupied.

The State then uses revenues generated from these “bed taxes” to bring down federal Medicaid funds, i.e., the federal match.

Here’s what happens over time. After a few years of these bed taxes, the federal reimbursement generated from nursing home bed taxes are then used to draw down more federal funds. (A type of Ponzi scheme?)

Obviously, State legislatures like bed taxes because the income generated means that less general State revenue funds need to be allocated to draw down free federal Medicaid funds. States that have provider/bed taxes therefore save State general revenue expenditures because States use the provider tax – not State general revenue funds - to generate the federal reimbursements. (No idea what’s in it for the federal government.)

It is quite important for advocates for older and disabled Americans to understand that bed taxes directly impact on your State’s Medicaid long-term, home and community-based versus institutional policy.

As the National Conference of State Legislatures recently wrote, “the rate of taxation and the allocation or earmarking of the revenue can have far-reaching impacts on state health programs and on overall state budgets.” “Earmarking” means where the federal funds that the bed taxes draw down are then used. “Far-reaching impacts” mean that institutional versus community-based services is dictated not by the ADA but where the bed-taxes come from and where they are used.

No one should be naïve. Nursing homes and other institutions do not voluntarily agree to pay these bed taxes without getting something in return.

Did you ever wonder why nursing homes receive, often annually, increased nursing home Medicaid per diem rates, while home and community-based service programs do not receive similar increases (and/or are actually reduced)? Look at how your State uses its Provider Taxes. Of course, these taxes could be used for any and all Medicaid programs, including HCBS, but as NCSL notes above they are “earmarked” for specific programs.

The National Conference of State Legislature report stated that “in a majority of cases, the cost of the tax is promised back to providers through an increase in the Medicaid reimbursement rate.” Yup, Medicaid nursing home reimbursement rates are increased as part of the sweet deal with nursing homes paying bed taxes: from the nursing homes as bed taxes back to the nursing homes as increased per diem reimbursements. Anyone want to wager whether the nursing homes make a profit on this scheme?

Advocates should find out which institutions in the 37 States pay these taxes and where the generated federal match is “earmarked.” If these funds are earmarked to keep institutions operating, they are not distributed “even handed” so home and community-based services receive a reasonable amount. Hmm, the Olmstead decision assumed “even handed” expenditures.

Here are the 2010 Bed Taxes for the 37 States that use them. This information was obtained via a FOIA request. If your State is not listed, it did not have a bed tax.

Arkansas..................... $65 .1m
California................... $412.9m
Connecticut................. $3.2m
Florida........................ $489.4m
Georgia....................... $194.9
Illinois......................... $1.501 b
Indiana........................ $86.7m
Iowa............................ $38.3m
Kansas........................ $32.7 m
Kentucky.................... $311.3m
Louisiana.................... $110.5m
Maine.......................... $138.3m
Maryland.................... $0.7m
Massachus.................. $601.9m
Michigan..................... $757.2m
Minnesota................... $711.6m
Mississippi.................. $272m
Missouri...................... $1.134b
Montana...................... $31m
Nebraska..................... $1m
Nevada........................ $29.6m
New Hampshire.......... $36.4m
New York .................. $3.549 b
North Carolina............ $133.5
North Dakota.............. $4.5 m
Ohio............................ $1.067b
Oklahoma................... $51.6m
Oregon....................... $35.5m
Pennsylvania............... $596.6m
Rhode Island............... $40.4m
South Carolina............ $66.5m
Tennessee................... $414.3m
Texas......................... $48.6m
Washington ................ $38.1m
West Virginia.............. $157,9m
Wisconsin .................. $74.4m
Wyoming ................... $4.7m

National ..................... $13.425 billion

Steve Gold, The Disability Odyssey continues

Back issues of other Information Bulletins are available online at http://www.stevegoldada.com
with a searchable Archive at this site divided into different subjects.
As of August, 2010, Information Bulletins will also be posted on my blog located at http://stevegoldada.blogspot.com/
To contact Steve Gold directly, write to stevegoldada@cs.com or call 215-627-7100.

The Nursing Practice Act and the ADA/Section 504.

The Nursing Practice Act and the ADA/Section 504. Information Bulletin #332 (May 2011)

The U.S. Department of Justice recently filed an amicus curiae brief in the California Supreme Court arguing in an IDEA/ “free appropriate public education” case (American Nurses Association v. Jack O’Connell) that the state’s Nursing Practice Act was preempted by the federal disabilities laws. Preemption means that the federal law - ADA, IDEA, 504, Federal Housing Act - trumped a state law that conflicts with the federal law..

The DOJ was quite emphatic that it’s position was limited to the facts in that case, i.e., where the California Dept of Education would permit a trained but unlicensed school employee to administer insulin per a doctor’s orders, but only if the other authorized/delegated persons were unavailable.

DOJ argued that the State law was preempted by the federal ADA and Section 504, because the State law presented obstacles to compliance with the IDEA and FAPE. It noted that the evidence established that because there were so few school nurses or other authorized persons available, “some students [who required insulin] have been deprived of their right to a FAPE.”

DOJ cited a number of cases that emphasized that disability rights laws required reasonable accommodations and that a “proposed accommodation under the ADA [or 504 or the Fair Housing Act] was not unreasonable simply because it might require defendants to violate state law.”

Advocates have faced the Nursing Practice Act restrictions in a number of contexts well beyond the IDEA and FAPE

How about integrating persons with disabilities into the community to comply with the ADA and the Olmstead decision.. Advocates have confronted the Nursing Practice Act when we have represented persons who use ventilators, who require suctioning, who need catheters changed, or who need to take medications but do not have the manual dexterity to take the meds themselves.
We have had States deny Medicaid Waiver services to these people because the States argue their Nursing Practice Act requires a nurse to provide the services. Then the States argue that, because more nursing services are required than the waiver offers, the persons are denied Waiver services and must remain institutionalized.

The above DOJ rationale would apply in the above vent, suctioning, etc., situations, all of which are non-IDEA. That is, if your State’s Nursing Practice Act requires a licensed nurse to provide any of the specific services listed in the preceding paragraph, this requirement should not be an obstacle or barrier to comply with “the most integrated” mandate of the ADA and the Olmstead decision. Reasonable accommodations are available.

States should either pay for the nurses in the community or permit people to have a reasonable accommodation of other people performing these tasks. But in no circumstance should the State be allowed to use the Nursing Practice Act as an obstacle to deny a person the ADA right to live in an integrated community.

Steve Gold, The Disability Odyssey continues

Back issues of other Information Bulletins are available online at http://www.stevegoldada.com with a searchable Archive at this site divided into different subjects. Information Bulletins are also be posted on my blog located at http://stevegoldada.blogspot.com/
To contact Steve Gold directly, write to stevegoldada@cs.com or call 215-627-7100.