Fee to subsidize nursing homes (7/20/02 Boston Globe) By Alice Dembner Moving to ease a nursing home crisis that has forced dozens of facilities to close in the last few years, the Legislature has devised a Robin Hood-like plan to generate $130 million in federal funds for the large majority of homes that accept poor patients. But the plan, laid out in the pending state budget, has a downside for about 8,000 patients who pay cash for their care. Unless their facilities pay the state fee from capital reserves, they will probably charge each patient about $3,300 a year above the current price. "I wish there were a better way of doing this," said Scott Plumb, senior vice president of the Massachusetts Extended Care Federation, which represents most of the state's nursing homes. "But the state's in as big a hole as we are. This is really our last hope. " At Marian Manor in South Boston, the state's largest nursing home with 366 patients, Sister Pauline Ross said the new money would improve patient care by enabling the home to hire more nurses and pay aides better. More than 80 percent of Marian Manor residents are poor enough to qualify for Medicaid. At facilities that are near bankruptcy because of high labor costs and low government reimbursement, the money will help keep the doors open, Plumb said. But to the residents of the state's approximately two-dozen primarily private-pay nursing homes and of the assisted living facilities linked to those homes, the measure is an unfair tax. "We feel discriminated against," said Barbara Levings, 77, a resident of the North Hill assisted living center in Needham. "It seems absurd for those of us who have planned for our long-term care to end up subsidizing, not just our nursing home, but nursing homes around the state. " Under the plan modeled on those in 18 other states, the state would charge each of 500 nursing homes a fee of $9 per patient per day. The state would return most of the $145 million generated to the nursing home industry as payments for Medicaid patients. A small portion would be used to fund other health expenses. Because the federal government matches state Medicaid spending 1 for 1, the move means an additional $130 million for the nursing homes overall. The money from these new fees will boost a federal-state appropriation of about $1. 4 billion for Medicaid patients in nursing homes. However, homes that have fewer Medicaid patients will subsidize homes with larger populations of poor patients. About 70 percent of 51,000 nursing home residents statewide are on Medicaid, another small percentage are on the separate federal Medicare system, and the rest pay cash or with private insurance. Yesterday, Jim Borghesani, a spokesman for Acting Governor Jane Swift, said that Swift supports the concept of the user fee, but will analyze the specifics before deciding whether to sign it into law. Wendy E. Warring, state Medicaid commissioner, issued a statement saying she also supports the idea, but is "concerned about infusing additional funds into the industry without having a clear measure of the value that will be received from these increases or assurance of the industry's long-term viability. " The Legislature earmarked $50 million of the new money for improving the wages and increasing the hours of direct care staff. It called for a report by October 2004 on how the money was used and whether the user fee placed a burden on individual residents. Mary Berrigan, general manager of the totally private-pay, family- owned Fairlawn Nursing Home in Lexington, said she will have to pass the fee on to residents and expects it will force some of the 104 residents to leave. "I wonder how many more individuals are going to be thrust into Medicaid," she said. "It's penalizing those who are trying to stay out of the government system. " But Plumb said the infusion will benefit nine out of 10 nursing homes and most residents by helping to halt the rapid turnover of staff due to low wages and poor working conditions. It will also help slow the closings that Plumb said have averaged a home every other week for the last three years and have forced patients to travel farther from their family homes to find a vacant nursing home bed. Plumb said Medicaid reimbursements have fallen short by about $20 per patient per day. The state increased Medicaid reimbursement rates in the last few years, but the economic downturn left little likelihood of another increase this year without the user fee. "This fills a good chunk of the hole we're in," Plumb said, adding, "There's a certain amount of ethical justice in rewarding facilities that have admitted poor people. "