The Health Care Association of Michigan (HCAM) today announced that more than $35 million in Medicaid cuts could begin to take effect as early as November 1, with 12 Upper Peninsula nursing facilities losing a combined estimated $1.8 million.
As part of Governor Whitmer’s actions around the budget, the Michigan Department of Health and Human Services (MDHHS) issued a Medicaid policy on September 30th that would significantly reduce reimbursement to nursing facilities. If there is not action to rescind this policy, funding for nursing facilities will be reduced by more than $35 million both this year and nearly $40 million next year, with significant loss of funding continuing for each year following 2020-2021. According to the policy bulletin the cut could take effect the first of the month.
“Quality employees drive quality care for our residents,” said HCAM President/CEO Melissa Samuel. “These Michigan employees and the Michigan patients for whom they provide care will be directly impacted by the cut to Medicaid. It is simply not good public policy to decrease funding that pays health care workers caring for our state’s most vulnerable and sickest population.”
A cut to Medicaid long-term care funding is, as a practical matter, a cut to the hours, wages, and benefits of the health care workers in nursing facilities. This is because the vast majority of provider costs – around 75 percent – are allocated to wages and benefits for employees. These Michigan employees and the patients for whom they provide care will be directly impacted by these cuts.
Many facilities across the state will face significant cuts of hundreds of thousands of dollars in a single year. Many providers will have little choice but to make staffing changes, which will impact the wages, benefits, and hours of health care workers, and the cuts may lead to layoffs as well. A cut of $200,000 to a single facility would equate to approximately four nurses or seven certified nurse aides.
Samuel continued, “HCAM urges a resolution to avoid funding decreases that could compromise care to one of Michigan’s most vulnerable populations. Michigan’s senior citizens deserve better. In the interests of Michigan’s seniors and the health care workers who care for them, it is imperative that the Medicaid funding be restored.”
