Nursing Home Profession Proposes Funding Shortfall Solution at No Cost to State

As the value of quality nursing home care is becoming increasingly important across the country, Texas — which struggles under one of the lowest Medicaid reimbursement rates in the nation — is not meeting its own expectations.

But Texas nursing home owners and operators are proposing a solution to change that, and are banding together behind it in an unprecedented display of unity. The solution is the Nursing Facility Reinvestment Allowance.

"The proposal is a provider-based solution to Texas' history of underfunding nursing home care that won't cost general revenue," said Kevin Warren, president and CEO of the nonprofit Texas Health Care Association, which advocates for skilled nursing and assisted living facilities.

The Nursing Facility Reinvestment Allowance, similar to an existing program for the state's intellectual and developmental disability services, will enable Texas to secure additional federal funding to make up for the Medicaid reimbursement shortfall.

Under the proposal, the Health and Human Services Commission would establish a uniform and broad-based fee for each patient day that will produce annual fees from all nursing facility providers. Revenue generated would enable Texas to secure federal matching funds. These additional funds would be directed to Texas nursing homes to eliminate the reimbursement shortfall for the first time in 20 years and go toward improving quality of care, enhancing staffing efforts and making much-needed capital improvements.

The "no cost to the state" funding couldn't come at a better time.

Citing the state's increase in nursing home deficiencies, a recent in-depth study conducted by COPE Health Solutions and The Bonadio Group linked the quality of care in Texas nursing homes to its low Medicaid reimbursement rate. That correlation is important because almost 70 percent of Texans in skilled nursing facilities rely on Medicaid after they've depleted their assets built up over a lifetime.

"Everyone wants to improve the quality of care in Texas nursing homes, but there's a cost associated with that," Warren said. "The Nursing Facility Reinvestment Allowance is an innovative plan to make sure Texas taxpayers aren't the ones paying that cost."