Cumberland Times-News

Local News

February 24, 2010

Nursing home administrators say tax would penalize elderly

Kevin Spradlin Cumberland Times-News

CUMBERLAND — Jeff Metz said a legislative proposal that would generate $40,000 for Egle Nursing Home in Lonaconing is a bad idea.

Metz, administrator for the 66-bed for-profit facility, said Senate Bill 141, cross-filed with House Bill 151, has a short-term gain that has distinct long-term risks. Gov. Martin O’Malley’s Budget Reconciliation and Financing Act of 2010 would double the state’s quality assessment, commonly known as the provider tax, from 2 percent to 4 percent.

Metz said the proposed increase unfairly taxes the state’s elderly population. Even the revenue generated from the proposal wouldn’t necessarily benefit senior care facility residents. The existing tax is earmarked to supplement the state’s medical assistance programs. Under the proposal in Annapolis, only 65 percent of the 4 percent tax would do so. The remaining 35 percent would be deposited into the state’s general fund.

“In essence, we’re taxing our most vulnerable population to help balance Maryland’s budget,” Metz said. “That’s just fundamentally wrong.”

In the short-term, facilities like Egle Nursing Home, with a larger population of Medicaid residents than private pay, could benefit. Danna Kauffman, a spokeswoman for senior care trade association LifeSpan Network, said Egle Nursing Home is one of about 68 facilities facing the same situation. However, those immediate benefits will cost everyone in the long run, she said.

Kauffman said the provider tax was implemented in 2007 and results were “OK” in the first year. Since then, however, state appropriations to nursing homes have been cut by about $132 million.

“We have the same tax at 2 percent but we’re not at the same revenue that we were,” Kauffman said. “You can do the math. It’s pretty easy. Less money, same tax.”

Troy Raines is administrator at Lions Center on Seton Drive in Cumberland. He oversees a 101-bed nonprofit facility. His is among the two-thirds of facilities that would be adversely impacted immediately. Not only would the Lions Center be hurt now, but would be hurt more later.

“With the way the economy is right now ... we actually had level funding last year but ended up with an 8 to 9 percent cut in medical assistance rates,” Raines said. “From what I’m hearing for next year, it’ll be level funding again, at the lesser rates, but the provider tax increases. It’s sort of like a double whammy.”

Kauffman said that once a tax is in in place, “you never get rid of it.”

She argued the proposed tax increase would mean about a $2,400 per-year rate increase for self-pay residents. In other words, Kauffman said, the legislation penalizes those who take steps to pay for their own long-term care. Self-pay residents do not benefit from state or federal Medicaid reimbursements.

“That’s nothing against any resident who needs Medicaid,” Kauffman said. “That’s an entitlement program. But ... private pay individuals made a commitment to fund their own long-term care and we should applaud them for it.”

Both Metz and Raines said they have contacted state lawmakers, including Sen. George Edwards and Delegate Wendell Beitzel, among others, and encouraged them to vote against the proposal.

Kevin Spradlin can be reached at kspradlin@times-news.com.

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