Laws are complicated. If you don’t believe me, have a look for yourself at the “Middle Class Tax Relief and Job Creation Act of 2012.” It’s a mouthful, all 101 pages of it. Even the summary is no slouch.Those of you who remember Schoolhouse Rock know that no bill gets through Congress without some modifications and changes being made in committee. Some of the changes have little or nothing to do with the subject matter of the bill. These amendments are called legislative riders. They are the reason why a bill that is supposed to provide for job creation and tax relief is also being used to cut funding to nursing homes.The cuts are related to Medicaid and Medicare deductibles. Most people who are under 65 think that Medicare is free healthcare for people 65 and older. While it’s true that Medicare covers most costs for people over 65, it still requires a deductible of around $1500 be paid every year.As you might imagine, not every senior in a nursing home can make that payment. Until now, nursing homes were required to make a reasonable effort to collect that money and, if they couldn’t, Medicare and Medicaid would reimburse them for their loss.
Not any more.
Section 3201 of the act reads as follows:Sec. 3201 – Reduction of Bad Debt Treated as an Allowable Cost. Medicare reimburses providers for beneficiaries’ unpaid coinsurance and deductible amounts after reasonable collection efforts. Medicare reimburses providers between 70 and 100 percent of beneficiary bad debt. This provision phases down bad debt reimbursement for all providers to 65 percent. Providers currently reimbursed 100 percent of their bad debt would have a three-year transition of 88 percent, 76 percent and then 65 percent. Providers reimbursed 70 percent of their bad debt would be reduced to 65 percent. This provision is estimated to generate $6.9 billion in savings over the next eleven years.Instead of reimbursing nursing homes for 100% of their loss, this will begin cutting down the reimbursement over three years. In the end, the losses will amount to almost $30 Million for the state of Illinois.In theory, this loss will fall on nursing homes, and not on the residents. I beg to differ. Anytime funding is cut from nursing homes, the residents always suffer. For-profit nursing homes demand a profit, and it’s easier to cut staff and services than to displease shareholders.These next three years will be very serious for families of people in Illinois nursing homes. As the cuts filter down, nursing homes will try to discharge residents without the ability to pay their premium, and nursing homes may become segregated along class lines in spite of the universal qualities of Medicare and Medicaid.If you have a loved one in an Illinois nursing home, it’s important that you carefully monitor any changes in the quality of service your loved one is receiving. If you feel they are being abused or neglected, you can contact my law firm for a free and confidential evaluation of your case.