Studies show danger of cutting Medicare add-ons. (NH News Notes).

The reports have been written, the numbers have been crunched and the results, says the American Health Care Association (AHCA), are clear: Failing to fully restore the Medicare add-on payments from the 1999 Balanced Budget Refinement Act (BBRA) and the Benefits Improvement Protection Act of 2000 could lead to dire circumstances for the nation's long-term care system.

Although the studies cited by AHCA do not take into account that the height of the Medicare "cliff" has been decreased (see Nursing Homes/Long Term Care Management, June 2002, p. 10), AHCA President and CEO Charles H. Roadman II, MD, said that, nevertheless, impending Medicare cuts "...will immediately jeopardize access to quality long-term care for America's seniors."

One study found that implementation of the Medicare Prospective Payment System (PPS) was associated with a statistically significant increase in the number of quality-of-care deficiencies, but the trend reversed following the Medicare funding adjustments in the BBRA. The study, by the University of North Carolina at Chapel Hill (UNC) School of Public Health, with financial support from Beverly Enterprises, also suggests that PPS implementation was associated with a reduction in professional nurse staffing hours, also reversed after BBRA went into effect.

Commenting on the study, Bill Roper, MD, MPH, dean of UNC's School of Public Health and former Health Care Financing Administration administrator, said in a UNC release, "[The study] directly links PPS rates to quality-related factors and finds that there may be cause for concern." An analysis by Muse & Associates indicates that seniors and providers in California, New York, Florida, Pennsylvania, Texas, Ohio, Indiana, Michigan, Massachusetts and New Jersey should be concerned, because their states face the steepest Medicare cuts.

Another study--by Al Dobson, senior vice-president and director of healthcare finance practice of the healthcare policy research firm the Lewin Group--painted a grim picture for providers, as well. According to Dobson's analysis, if the add-ons are not renewed in their entirety, 51% of facilities could experience financial instability. If Medicare cuts take effect alongside likely freezes in state Medicaid funding because of large state deficits, the number of facilities that could face financial instability jumps to 61%.

Is relief on the way? According to John Schaeffler, AHCA's vice-president of legislative affairs, debate on the Medicare add-ons should pick up in Congress as the summer progresses.