By Todd Bergstrom
Governor Mark Dayton’s budget proposal to reduce operating payment rates paid for the lowest case mix categories (PA1 and BC1) of the nursing facility case mix classification system by 25% will significantly cut most nursing facilities. According to the budget documents, the proposal will cut nursing facility funding by $17.4 million, and will reduce rates paid by or on behalf of 4,000 nursing facility residents. Note, the BC1 category is a really small percentage of paid days, and ultimately will be wrapped into PA1 because PA1 will become the new penalty rate as well.
Care Providers of Minnesota has conducted an analysis of the 10-1-2009 operating rates and census reported in the 9-30-2008 cost report for all Minnesota nursing facilities. According to the analysis:
- PA1 and BC1 days as a percent of Medicaid and private pay days is 12.69%
- The average and estimated percent reduction to nursing facilities from the 25% cut to PA1 and BC1 is 2.42%.
- The cut reduces total nursing facility operating revenue by $30.2 million.
The following table provides a more detailed look by percentile at how the cut will impact all nursing facilities. A percentile is the value of a variable below which a certain percent of observations fall. For example, one way to read the 50th percentile (or median), is that 50%—or half of the nursing facilities—will see a cut of 2.35% or greater, and have PA1 and BC1 days as a percent of Medicaid and private pay days of 12.16% or greater.
|
Percentile of Nursing Facility |
Estimated Total MA/PP Reduction from 25% Cut to PA1 and BC1 |
Estimated Percent Reduction from 25% Cut to PA1 and BC1 |
PA1 and BC1 Days as a Percent of Medicaid and Private Pay days* |
|
1% |
($326,987) |
-9.07% |
40.99% |
|
5% |
($192,187) |
-5.49% |
26.82% |
|
10% |
($147,390) |
-4.63% |
22.78% |
|
15% |
($125,584) |
-4.04% |
19.67% |
|
20% |
($111,807) |
-3.68% |
18.31% |
|
25% |
($100,134) |
-3.35% |
16.76% |
|
30% |
($90,854) |
-3.01% |
15.24% |
|
35% |
($83,446) |
-2.80% |
14.17% |
|
40% |
($76,611) |
-2.65% |
13.42% |
|
45% |
($69,525) |
-2.53% |
12.94% |
|
50% |
($63,978) |
-2.35% |
12.16% |
|
55% |
($60,306) |
-2.22% |
11.53% |
|
60% |
($54,825) |
-2.05% |
10.67% |
|
65% |
($50,503) |
-1.90% |
9.73% |
|
70% |
($45,192) |
-1.70% |
8.82% |
|
75% |
($39,175) |
-1.58% |
8.12% |
|
80% |
($34,036) |
-1.36% |
7.13% |
|
85% |
($28,452) |
-1.18% |
6.07% |
|
90% |
($24,247) |
-0.96% |
4.96% |
|
95% |
($17,297) |
-0.65% |
3.61% |
|
99% |
($1,077) |
-0.21% |
1.08% |
|
|
|
|
*inversely sorted |
Please contact Todd Bergstrom at the Association office if you have questions about this issue.
Todd Bergstrom
952.851.2486
tbergstrom@careproviders.org
Resources
|
Care Providers of Minnesota 7851 Metro Parkway • Suite 200 • Bloomington, MN 55425 Phone: 952.854.2844 • Fax: 952.854.6214 • MN Toll-Free: 800.462.0024 • www.careproviders.org |