Funding crisis poised to grow following Legislature’s inaction

Despite the valiant efforts of several legislators, the 85th Regular Session ended without addressing the significant Medicaid reimbursement gap faced by Texas nursing homes.

HB 2766, by Rep. J.D. Sheffield and Sen. Juan “Chuy” Hinojosa, would have closed the gap between the cost of care and what the state pays. Also referred to as the Nursing Facility Reinvestment Allowance, it would have improved the quality of long term care in Texas, all at no cost to the state.

The bill passed the House with bipartisan support and more than two-thirds of the vote. But it never made it to the Senate floor for a debate, dying in the final hours before that chamber’s deadline.

By failing to pass the plan, lawmakers have now forced a series of increasingly difficult decisions on the owners of skilled nursing facilities, who have struggled with Medicaid reimbursements that don’t even cover the cost of care for more than 15 years.

“We are struggling to improve the quality of care in Texas, but we’re also struggling with a staffing crisis because we can’t pay our nursing staff what they are worth,” said Eddie Parades, vice president of government affairs with StoneGate Senior Living and a member of the Texas Health Care Association, which represents 500 nursing homes across the state.

The continued reimbursement shortfall will not only hinder efforts to improve care, it may cause some skilled nursing centers to close down entirely, Parades said. “We were already on razor-thin margins before, but this may just push some homes over the edge,” Parades said.

Texas’ Medicaid reimbursement rate — set by the Legislature — is consistently among the lowest in the nation. That’s important because more than 80 percent of Texans in skilled nursing facilities rely on Medicaid and Medicare after they deplete the assets they built up over a lifetime to pay for their care.

The state’s low nursing home Medicaid reimbursement rate leaves providers unable to attract and retain staff, resulting in faltering inspection performances.

Before homes close, quality may continue to slide as administrators try to do more with less, said Kevin Warren, president and CEO of the Texas Health Care Association.

“The staffing and underfunding issues are already significant realities. Now, with a third of the nursing facilities in Texas located in Hurricane Harvey affected counties, these issues are now easily compounded by the storm’s devastating effects,” he said.

Administrators have already been struggling to maintain quality care despite the underfunding. A study conducted in 2016 for the Texas Health Care Association shows they’ve not always been successful, with Texas nursing homes running counter to a national trend of improving health inspection scores.