Kansas long-term care providers say they’re facing financial crises on many fronts

Cindy Luxem, a lobbyist for the Kansas Health Care Association, tells the House Health and Human Services Committee that long-term care providers in Kansas are facing grave financial hardships due to low reimbursement rates, backlogs in processing Medicaid applications and a recent massive spike in civil penalties for health and safety violations.

? Owners and advocates of nursing homes and other long-term care providers told a legislative committee Thursday that they are being squeezed financially on many fronts.

The combination of slow processing of Medicaid applications, cuts in their reimbursement rates and a massive spike in the volume of civil penalties they are being forced to pay are all working to threaten providers’ financial viability, the advocates said.

Rachel Monger, who represents LeadingAge Kansas, a group of faith-based and nonprofit senior service providers, said long-term care facilities throughout the Midwest are facing similar issues.

She cited a recent survey by a Minnesota-based consulting firm that found long-term care facilities throughout the Midwest reported operating at a net loss of about 0.5 percent in 2016.

“That is absolutely something we are seeing here in Kansas,” she told the House Health and Human Services Committee. “I don’t know what kind of organization, whether it’s for-profit or not-for-profit, that can sustain itself with negative operating margins.”

One of the biggest concerns advocates expressed has been the recent and dramatic spike in the volume of civil fines being levied against nursing homes for violations that they said used to be considered relatively minor.

During a five-year period, Monger said, the total volume of fines levied against long-term care facilities in Kansas rose from $2,275 in 2012 to nearly $4.7 million in 2016.

Rodney Whittington, CEO of Villa St. Francis Catholic Care Center in Olathe, said his facility was slapped with a $200,000 fine because a resident with dementia confused other residents with her husband, touched them and kissed them on the forehead.

He said federal regulators called that inappropriate sexual behavior that put 43 residents at risk, resulting in the stiff fine from the federal Centers for Medicare and Medicaid Services.

“We were able to get CMS to agree to let that go away, but we still have over six figures in legal expenses and a year wasted in my life when I didn’t get to do anything but that,” he said.

Cindy Luxem, from the Kansas Health Care Association, which represents over 250 long-term care providers, said much of the increase in fines is due to an effort by the Obama administration to standardize policies for classifying and punishing violations of safety regulations.

But others said the Kansas Department for Aging and Disability Services shares responsibility because its inspectors are the ones conducting the reviews as part of their role in administering federal rules.

Meanwhile, advocates said recent cuts in Medicaid reimbursement rates for long-term care facilities, and the state’s slowness in processing Medicaid applications, is taking a big bite out of their bottom line.

Several complained that they often care for patients for months at a time while waiting for a Medicaid application to be processed, even though federal rules say they are supposed to be processed within 45 days.

In addition, they said, the state of Kansas cut their reimbursement rates 4.5 percent in 2016. And while lawmakers restored that cut the following year, the state simultaneously cut their rates again by about 3 percent.

“This means that nursing homes have netted only an approximate 1 percent restoration of their 2016 rate cuts,” Monger told the panel.

Luxem, meanwhile, said the financial problems that long-term care facilities face also threaten state and local economies.

“We have $1.7 billion in this state that we add on a daily and yearly basis to the economy of Kansas, so it’s important that we get paid, and it’s important that our folks are taking care of seniors,” she said.

Thursday’s hearing was mainly for the purpose of allowing the owners and advocates to air their grievances.

Committee chairman Rep. Dan Hawkins, R-Wichita, said he would invite Aging and Disabilities Services Secretary Tim Keck to testify at a meeting in the near future to respond to those concerns.