ND bill could hike cost of nursing home care to cover budget cuts
FARGO—Nursing home residents could be forced to pay hundreds of dollars more per month under a legislative proposal to charges a new fee to cover state budget cuts.
North Dakota nursing homes back the proposed fee on the care they provide as a "last resort" in the event funding is not restored from budget cuts that administrators say would otherwise force facilities to cut staff.
House Bill 1130, introduced on behalf of the North Dakota Office of Management and Budget, was in response to pleas from nursing homes to provide a funding solution that would spare the need to reduce staff—and therefore erode quality of care—in the face of state budget cuts.
"This is a better alternative than the deep cuts continuing," said Shelly Peterson, president of the North Dakota Long Term Care Association, which represents the state's 80 senior care centers. "We need to try and maintain quality."
The bill would impose a 5 percent fee on nursing home care. The North Dakota Department of Human Services estimates the fee could net almost $20 million over 18 months, Peterson said.
That could provide a revenue source to restore all budget reductions caused by a process called allotments.
The impact from the state's allotment cuts to North Dakota nursing homes is $25 million a year, including the resulting loss of federal funds and reduced private payments, which must match state support by law, Peterson said.
The bill would charge an assessment to nursing homes, who would pass along the cost of the new fee to residents.
"As an option, it should be on the table," Peterson said, noting that 43 states and the District of Columbia have some form of fee, assessment or surcharge on nursing home care that has been approved by the federal government.
AARP North Dakota, which represents more than 87,000 residents who are 50 and older, has not taken a position on the nursing home assessment.
"We are certainly aware of it and we're watching it," Josh Askvig, AARP North Dakota's state director. "We have some questions about the idea and some concerns."
Bethany Retirement Living, which operates two nursing homes in Fargo, would lose $1.3 million during the rest of the biennium and $5 million next biennium if funding from the budget cuts is not restored, said Shawn Stuhaug, Bethany's president and CEO.
"We really feel we have no other choice," if funding cuts aren't restored, but to support the proposed fee, he said. "What we were hoping for is to have our funding restored."
Tony Keelin, CEO of Rosewood on Broadway and interim CEO at Villa Maria, agreed.
Rosewood would lose more than $500,000 a year if funding cuts aren't restored, and Villa Maria would face a similar shortfall, Keelin said.
"This provider assessment was a last resort alternative," he said. At nursing homes, personnel is generally about 80 percent of the budget, so cutting costs generally requires cutting staff.
"It takes people to take care of people," Keelin said.
The average statewide starting wage for a certified nursing aide is $14.27 an hour, a little more than a dollar higher in Fargo.
The cost for residents would vary greatly, depending upon the services provided. Nursing home care ranges between $6,000 and $7,000 a month, so a 5 percent surcharge bill would add between $300 and $350 a month to the monthly bill, Stuhaug said.
If funding cuts aren't restored and the proposed fee is adopted, the North Dakota Long Term Care Association will propose a two-year sunshine clause, so the fee is not automatically made permanent and must be evaluated, Peterson said.
Nursing homes also would like language added to the bill to ensure that any assessments on nursing homes can't be used for services not provided by nursing homes, she said.
The proposal was prepared by the administration of former Gov. Jack Dalrymple.
Gov. Doug Burgum, who took office Dec. 15, has not yet released his budget recommendations.
The bill is set for its first committee hearing Monday, Jan. 16.