Deep cuts in funding strain Ohio care facilities

SEE ALSO: • Residents get a voice in inspection of state’s 956 nursing homes

• Code violations lack full context, nursing-home worker argues

• Nursing home residents struggle with a $40 allowance per month



Valley Renaissance hearing

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Discharge hearing from Valley Renaissance Healthcare Center

Harrington nursing home 2005-2010

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Nursing Facilities, Staffing, Residents and Facility Deficiencies, 2005 Through 2010

Budget Projection of OHP Medical Services - SFY 2010

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Budget Projection of OHP Medical Services - SFY 2010

Budget Projection of OHP Medical Services - SFY 2011

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Budget Projection of OHP Medical Services - SFY 2011

Budget Projection of OHP Medical Services - SFY 2012

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Budget Projection of OHP Medical Services - SFY 2012

Budget Projection of OHP Medical Services - SFY 2013

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Budget Projection of OHP Medical Services - SFY 2013

As a child, Sam Berresford visited a former neighbor in a nursing home. “People were yelling, strapped in chairs, and it smelt like urine. It was a scary place,” he said. “I was scared to death.”

The experience inspired Berresford to consider a career in nursing, but decided to become an administrator instead. Now he is in charge of Cortland Healthcare Center in Cortland.

“I love my job,” he said. However, his job and those of other administrators are getting harder now that the 956 nursing homes in Ohio are getting less money from Medicaid and Medicare.

House Bill 153 was implemented in July 2011, the beginning of the state fiscal year. It rebalanced funding for long-term care by cutting Medicaid rates paid to nursing homes by about 6 percent.

It was one of the largest budget cuts in recent years.

Then in October 2011, Medicare cut funding by an average of 11 percent nationally, claiming it had underestimated the cost of changes made in skilled nursing facilities the year before. Some Ohio facilities faced cuts of up to 12 percent.

These two major cuts within six months proved challenging for many facilities, said Peter Van Runkle, executive director for the Ohio Health Care Association, which represents 750 long-term and special care facilities in Ohio.

“Our members have been doing their best to provide quality care, but it’s been very difficult to do that,” he said. “It created a lot of stress.”

The Numbers Tell The Story

Once the Great Recession of 2008 hit, it wasn’t just consumers who had to tighten their belts. Losses in revenue affected states and the federal government as well, which is why reimbursement rates for nursing homes were reduced.

Analysis of flash reports of Ohio budgets shows that in fiscal year 2010, the state spent 11 percent of its $24.14 billion budget on nursing homes. By fiscal year 2012, when the state budget was at $26.39 billion, the percentage dropped to 10 percent, with a savings of $234 million.

According to the Governor’s Office of Health Transformation, Medicaid reimbursements for nursing homes has decreased more than 5.8 percent in the past year. The average daily reimbursement per patient was $176.27 in 2010, with the rate falling to $167.25 in 2012.

The U.S. Centers for Medicare and Medicaid Services list 78,221 residents in 956 Ohio nursing homes. Most of these residents are on Medicaid.

The majority of nursing home funding comes from the state’s disbursement of the Medicaid program, which accounted for 21 percent of the state’s medical services budget in fiscal year 2010 and dropped to 16 percent in 2012.

Nursing homes receive money from several sources. According to the U.S. Centers for Medicare and Medicaid Services, nursing homes in the nation receive 42.9 percent of their money from Medicaid, 19.8 percent from Medicare, 24 percent out of pocket and the remaining 13.3 percent from private health insurance and other private funds.

The new Ohio bill also implemented funding changes that were outlined in House Bill 66. That bill, enacted in 2005, changed how Medicaid paid for long-term care. The state shifted from a cost-based payment system to a price-based system. In essence, the state opted to not reimburse nursing homes for what they paid for supplies and services, but what they should have paid for them.

Also, the state is promoting home and community based care as an alternative to institutional care.

Quality was also addressed. Under HB 153, nursing homes that meet five of 20 quality measures will not face funding cuts by the state, said Van Runkle. These measures are grouped in five categories: performance, choice, clinical, environment and staffing.

How Homes Handled The Cuts

Faced with cuts in reimbursements, local nursing home administrators had to choose how to meet the challenge of reducing spending.

One way was staffing.

“When they cut the funding, they cut the staffing ratio as well,” Berresford said.

To absorb a funding cut of $100,000 in 2011, Cortland cut department head positions and delegated that work to other staff members such as registered nurses, certified nursing assistants and state-tested nurses aides.

“So my residents didn’t feel a change, they never noticed that we got thousands upon thousands cut,” he said. “They still get the same care, they get the same food – everything, nothing changed for them.”

Other facilities also anticipated the state budget cuts. Vista Care Centers, formerly Briarfield, operates four skilled nursing facilities and two independent living facilities in Mahoning, Trumbull and Columbiana counties.

“As a company, we have always been fiscally responsible,” said Tracy D’Andrea, chief operations officer of Vista Care Centers.

“We predicted when the budget cuts would occur. It was actually an opportunity, more so than a challenge, to be better.”

Vista Care changed staffing levels by evaluating hours when residents needed the least amount of care and reduced staffing during those hours.

“We looked at those hours and made adjustments that way,” D’Andrea said. “It did not affect the quality of care.”

Vista Care also looked into other ways to cut costs, such as group purchasing. This allows several facilities to group together and buy items in bulk.

Adequate Staffing Levels Hard to Determine

While state budget cuts aimed to curb Medicaid spending and boost quality measures, they can also affect staffing levels, which some experts say is paramount to quality care.

“It’s all about staffing and as a country, as a state, in the government we don’t have a commitment to make sure these homes have adequate staffing, we can’t expect the care to get better,” said Charlene Harrington, a registered nurse and professor emeritus at University of California at San Francisco where she studies staffing, funding and quality of care in the nation’s long-term care system.

In her 30 years in the business, Harrington has not seen a significant growth in quality care or staffing levels.

“The staffing levels are starting to increase a little, but they’re still completely inadequate. That’s why we have so many horrible quality problems all across the country,” Harrington said.

Harrington and other researchers say staffing levels, which include all certified and support staff, should be at 4.1 hours for each resident per day. Ohio averages 3 hours and 58 minutes per residents, according to

Cortland Healthcare averages one aide for every 12 residents, and one registered nurse and one licensed practical nurse for every 25 residents.

Harrington said a nursing assistant shouldn’t have more than six or seven patients.

She also believes Medicare’s five-star rating system is helping to increase staffing levels. Medicare using this system at it’s “Nursing Home Compare” website to rate nursing homes in several categories: overall, health inspections, quality and staffing. People looking at homes for a loved one may be less inclined to consider a facility with a one-star rating.

However, the biggest problem is the state and federal governments don’t have a guideline for optimal staffing.

“Federal law requires all nursing homes to provide enough staff to adequately care for residents,” states the Medicare website. “However, there is no current federal standard for the best nursing home staffing levels.”

The federal government does require nursing homes to have at least one registered nurse on duty for “at least eight straight hours a day, seven days a week.” Also, there must be a licensed nurse on duty 24 hours a day.

The site also warns users that the staffing levels are reported by the nursing homes and Medicare has no way to verify the accuracy of those numbers.

In Ohio, nursing facilities can skirt staffing issues without facing financial penalties simply by meeting one of the other 20 quality measures identified by the state. As long as facilities meet five of the 20, they won’t face reimbursement reductions.

Harrington said states can enact legislation to increase staffing levels, but many rarely will.

“The reason the states don’t want to increase the staffing is because then they have to spend more on the Medicaid rates.”

A $30 million budget bill that would have given nursing homes more money, providing that they adhered to quality measures, won approval in the Ohio House and Senate in April and May, respectively. However, Kasich vetoed the bill in June, saying that no new information had been presented to justify the specific amount requested.

“We would beg to differ on that,” said Van Runkle. “We will continue to support additional funding for meeting quality measures, as well some other adjustments to the reimbursement formula and other policy items not directly related to Medicaid rates.”

As Berresford said, facilities won’t have a hard time finding people to do the work, but they will have a hard time compensating them adequately for their work. is a collaborative effort between the Youngstown State University journalism program, Kent State University, The University of Akron and professional media outlets including, WYSU-FM Radio and The Vindicator (Youngstown), The Beacon Journal and Rubber City Radio (Akron).

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