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Long-term care facilities worry about impact of Pawlenty's proposed budget cuts

Long-term care facilities face cuts under Gov. Tim Pawlenty's state budget proposal, but that only creates deeper future problems, advocates say.

"There's no proposal on how we're going to address long-term care financing reform," Patti Cullen, president and CEO of Care Providers of Minnesota, said last week in a meeting with the Pioneer's Editorial Board.

"Last year was the first baby boomer turned 62, and we're going to have 10,000 a day until 2025," she said. "You're going to have a situation where there will be far more individuals over age 65 than school-age kids."

With the needs associated with elder care, "we'll bust the budget," Cullen admits. "We have to figure out a plan so that people are incentivized to help plan to pay for, as a personal responsibility, to pay for long-term care."

Two bills have been introduced to start the ball rolling, but Cullen says she expects no serious action:

-- Adopting the Nebraska savings plan, which offers a tax credit for people establishing long-term care accounts.

-- Creating a mandatory payroll tax that sets aside money for a long-term care pool.

Both bills are authored by Rep. Paul Thissen, DFL-Minneapolis. "It's a process to at least get the discussion started," Cullen said. "We need a bill out there to say this is what we need to do."

Meanwhile, there are fewer nursing home beds available in Minnesota as homes close that can't survive on the public assistance dollars. There currently is a $23.26 per day per patient gap between costs and reimbursements through Medicaid, she said. There have been 53 nursing facility closures since 2000.

"We'd better have a lot more home care, otherwise we're not going to be able to meet the demands of a growing elderly population," Cullen said.

Pawlenty's proposal, which will be updated after Tuesday's budget forecast, affects both access and economic stability, she said.

It limits access to nursing facilities and waivered services by tightening the standards for nursing home admittance, she said. The next two-year budget would cut $36.3 million to facilities.

The budget also eliminates dental coverage for adults and critical access dental care, leaving Medical Assistance elderly waiver patients without access to routine dental care. It would save $50.3 million.

The budget also eliminates coverage of rehabilitation services, denying needed rehab services to patients not covered by Medicare, saving $6.8 million.

Cullen said Pawlenty's proposal would reduce funding for nursing facilities by repealing rebasing and a reduction in an incentive for bed closures. Rates are now based on 2002 costs, and rebasing would refigure rates based on current costs. That move saves $4.65 million.

Even bigger, Pawlenty proposes to reduce the long-term care rate for home and community-based services, saving $84.9 million.

Long-term care plays a vital role in the state's economy, Cullen said, with the sector supporting more than 142,000 jobs in Minnesota and having a total economic impact of more than $9.8 billion a year.

"The closest we got to reform is rebasing, and that's being repealed," Cullen said. "We're not pleased about any of that."

The governor's budget, however, is probably the high-water mark for long-term care programs and services, Cullen said.

While Minnesota may get $9 billion in federal economic stimulus funds, Cullen said that $2 billion will go toward a federal match for Medical Assistance but it may not necessarily go to plug holes in the governor's budget.

"It's a different time -- by the time somebody actually needs care, they really need care," Cullen said.

Most irritating, she said, was cutting the dental care. "It was an easy slice to do, because other states don't give that service, but for our population ... if someone doesn't have good teeth, they get dehydrated, they go to the hospital. That's not a cheap solution."

And the loss of rehab reimbursements could close centers such as Courage Center, she said.

"Where people will be taken care of is a big concern," she said.

In order to provide services to a continually growing older Minnesota population, elder care advocates -- banded together as the Long-Term Care Imperative -- have a legislative agenda for this session.

Key to it is:

-- Improve and streamline consumer access to home and community-based services by reducing fragmentation in waiver-financed home care and assisted living programs by allowing consumers to receive all authorized services from a single provider.

-- Remove administrative barriers to the availability of sliding-scale fee supported home care in the state's Alternative Care program.

-- Prevent unnecessary admissions to skilled nursing facilities by reimbursing short-term incidental nursing services for community-dwelling seniors.

-- Allow for increased private contributions.

-- Allow for funding through local referendums for home and community-based infrastructure in various regions of the state.

-- Provide funding for employee health insurance across long-term care with existing funds earmarked for the purpose.

-- Improve long-term care services with funds available to the state from an increase in the federal Medicaid match percentage.

Cullen said personal responsibility is also key, and steps must be made to urge people to save for long-term care needs.

For the short-term, the Long-Term Care Imperative seeks an eight-year phase-in of the operating rate rebasing, with a goal of reducing the more than $20 a day per resident difference between the average Medical Assistance rate and the average cost of care.

Pawlenty's budget would roll back a temporary 1 percent nursing facility rate increase, and the coalition would see that increase made permanent.

As to personal responsibility, Cullen said the group would seek tighter rules on asset distribution which would capture more private pay assets for long-term care.

"We've pretty much resigned ourselves that a freeze is the best we're going to do," Cullen said.

Everything should be on the table with a projected $7 billion budget deficit, she adds.

"Think carefully about what you're promising K-12," she said. "I don't want to fight with the schools, but if you look at the numbers, we will have more over 65 than school-age kids. Same issue -- lack of money -- two different reasons: the schools have problems because of declining enrollment, we have a problem because it's increasing enrollment."