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Moratorium madness.

Freeze on Facility Permits Doesn't Rein In Debate

A MORATORIUM ON LONG-term residential care for the elderly was recently extended until October, but whether the freeze is an effective stopgap or mere symbolism appears debatable.

Nursing homes, residential care facilities and home health agencies are affected by the moratorium, which effectively puts a lid on growth in those areas by shutting off the issuance of permit applications.

Initially enacted last May, the moratorium has been extended until Oct. 1. Whether or not it continues from there should hinge on the state's fiscal health.

The state hopes the move will "help stabilize the Medicaid provider situation by not having an increase in providers," says Orson Berry, director of the Arkansas Health Services Agency that issues the permits.

Although the moratorium affects three different areas of long-term care, it appears to be aimed at slowing the growth of Medicaid patients in nursing homes.

But the freeze also puts the skids on facilities accepting only private-pay patients. And it has what some say is a negligible effect in the home health area because existing agencies can expand in their area of service.

Some are skeptical that the freeze is really a significant benefit to the state's strapped finances, describing the measure in terms like "public relations" or "window dressing."

They point to a relatively stable number of Medicaid recipients in nursing homes over the years. They say the system strain has come from program increases such as Aid to Families With Dependent Children.

Two schools of thought seem to exist about whether a moratorium on new nursing homes and expansion of existing ones is a good thing.

On one hand, there is what could be called the "Field of Dreams" theory.

"It's the theory that if you build it, they will come," says Larry Taylor, a North Little Rock health planning and regulatory consultant. "And in my opinion, it has more PR effect than actual effect."

As additional nursing home beds are added, some say a scramble will ensue to fill them. That's where the state gets hurt.

"The more nursing home beds you have, the more nursing homes are going to go out and find people with the state paying the bill," says Scott Holladay, executive director of Arkansas Seniors Organized for Progress.

On the other hand, more beds might "improve quality of service as well as hold down costs," Holladay says. "I honestly don't know which is the right thing to do."

'Overbedding' Problems

David Sneed, executive director of the Area Agency on Aging of Southwest Arkansas, says the state needs to monitor nursing home growth to guard against oversupply.

In Howard County, where the 65-plus population slightly exceeds 2,000, there are 300 beds per 1,000 residents 65 and over. Too many, Sneed says.

That results in overzealous efforts to fill the beds, he says, even if it means seeking residents out of state, as one area nursing home has done.

"There's been an inordinate amount of out-of-state residents into Arkansas homes, which puts a strain on the state's budget," Sneed says.

While Sneed's corner of the state has problems with "overbedding," Faulkner County has the opposite problem.

"You can't get anyone in a nursing home in Faulkner County," Taylor says.

He says he has a Faulkner County nursing home client who has been trying since October to add 20 beds to meet demand. His client has agreed to accept only private-pay patients, but the moratorium stands regardless.

Those are the types of situations the Arkansas Health Care Association is concerned about. The group is a trade organization representing nursing homes.

George Jernigan, an attorney for AHCA, says the group wants orderly and systematic growth, rather than growth that swings pendulum-like between moratoriums.

"We just oppose the government saying no one can get in the business, but we think the beds should be allocated on a methodology basis," he says. "It shouldn't be done haphazardly or because of political pressure."

In the past decade, the state has shifted back and forth between moratoriums. Each time the AHCA has opposed them.

Last month, when the moratorium came up for renewal, the AHCA issued a statement. It said while the organization did not believe the freeze was an effective cost-containment measure, it would not oppose it because of the Medicaid crisis.

But the AHCA requested of Health Services that there be no more moratorium extensions. Also, it requested the agency's commission work with the association to refine the current methodology of determining the need for beds.

Another Debate

What methodology determines the need for nursing home beds is another area of disagreement.

Berry says the Health Services Commission has adopted a "utilization-based methodology that would allow a nursing home with a 96 percent occupancy to add 10 beds or 10 percent of their licensed capacity, whichever was greater."

Taylor favors a population-based planning methodology, which determines beds based on the population demographics of counties.

Jernigan says AHCA favors a combination of the two.

Taylor says, "I don't think there should be a moratorium on the areas that have a population-based need."

He estimates about 10 counties have such a need based on the number of people 65 and over, while about 20 counties are oversupplied with nursing home beds.

Berry says there has to be some flexibility in making decisions on nursing home beds.

"You do want some flexibility within the system where there is some competition and people have a choice among nursing homes and aren't forced into a particular nursing home," he says. "At the same time, it's a controlled growth, and that's what we have in Arkansas, so that we average about 90 percent occupancy."

While the moratorium runs, Arkansas and the rest of the nation stand at a crossroads on health care issues while major reforms are hammered out.

What the state does next in regard to its long-term residential care facilities could ultimately depend on the outcome of those reform proposals, despite how the sides line up at home.
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Health Care Update; moratorium on long-term residential care for the elderly
Author:Walters, Dixie
Publication:Arkansas Business
Date:Apr 26, 1993
Words:1003
Previous Article:Pilgrimage to Little Rock.
Next Article:A new kind of nurse.
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