CARSON CITY -- Five Nevada nursing homes holding 700 patients might close this year because of a $20-per-day reduction in Medicaid payments that the state pays for their care.
Charles Perry, president of the Nevada Health Care Association, said that under Gov. Brian Sandoval's proposed budget, the amount the Medicaid program pays to the state would drop to $167 a day, and they could not afford to stay in business. There are 50 nursing homes in Nevada.
Medicaid is the program that provides free health care to the poor, disabled and some elderly.
"We are already under-reimbursed for our costs," Perry said. "We lose $12 to $15 a day for every Medicaid patient now before the $20-a-day cut."
But Charles Duarte, administrator of the state Health Care Financing and Policy Division, which runs Medicaid programs, said he does not know whether nursing homes are losing money.
"Presumably they are making a profit now, or they wouldn't be in business," he said.
Duarte said that by law, nursing homes have a legal obligation to discharge patients safely.
"They cannot just throw them on the street," he said, adding the state would try to place them in other nursing homes.
What could happen with nursing home patients is just another example of Nevada state government lacking revenue to deal with mounting problems, said Sen. Sheila Leslie, D-Reno.
"It is one of the areas the administration refers to as 'difficult choices,' " said Leslie, chairwoman of the Senate Revenue Committee. "We will have to weigh this decision (possible closures) the same way we weigh the impact of (whether to cut) mental health, juvenile justice and aging programs. The only alternative I see is finding more revenue, either by making deeper cuts elsewhere in the budget or through additional revenue enhancement."
Perry refused to identify the nursing homes in jeopardy of closing, saying that three are in Las Vegas and two in rural counties. Identifying them now only would panic patients and their families, Perry said.
He said nursing homes report annually their operating costs to a financial intermediary company that handles business for the state, and Duarte and Health and Human Services Director Mike Willden should be aware of their losses.
But Duarte said Tuesday the financial reports that the intermediary receives are not financial statements showing the net profits of nursing homes .
The state through the Medicaid program spends $180 million a year to provide care for 3,100 patients in nursing homes. Slightly more than half of the Medicaid funds come from the federal government.
"We wouldn't be proposing this cut except for the budget problem," Duarte said. "This is a big expense."
All states are suffering similar costs because of the aging population and growing costs of health care, he said. The U.S. Census Bureau in 2009 reported 11.9 percent of the Nevada population was 65 and older, compared with the national average of 12.9 percent.
Duarte said more than 60 percent of the people in nursing homes in Nevada have their expenses covered by Medicaid. The cuts would save $10 million a year in Medicaid costs; about $5 million of that amount is state revenue.
The administration is banking on more people receiving home care through $15.50-per-hour personal care attendants, rather than going into nursing homes. The state has funds to cover such costs.
But Perry contends most nursing home patients no longer have homes. If they do, their spouses probably are as old as they are and cannot provide the care .
He predicted that without a sufficient number of nursing homes, more older and disabled people will remain in hospitals where their expenses will be much higher than in nursing homes.