House healthcare reform legislation and administrative rule combined cut $44 billion in Medicare funds for long term care

Aug 20 2009

The Community Cares Coalition (CoCares) - a national coalition of community long term care businesses and organizations providing key services to the skilled nursing community - today said that while long term care businesses support reform measures to increase efficiencies in the healthcare system and promote cost savings, the current reform proposal in the U.S. House of Representatives and a recent administrative rule from the Centers for Medicare & Medicaid Services' (CMS') that cut $44 billion Medicare funds to long term care will have the opposite impact on nursing home care and the businesses and organizations that support the nation's long term care sector.

"FMS began building the business 20 years ago by helping retirement communities save money and improve their cost efficiencies through group purchasing," noted CoCares member Tim Gregson, President of FMS Purchasing and Services based in Clearwater, FL and the largest independently owned group purchasing organization in the Southeastern United States. "Wielding a machete to Medicare funds for eldercare has no place in healthcare reform. Our lawmakers must stop, seriously consider the dire implications of these enormous cuts and revise healthcare policy to truly reflect reform and improvement in our healthcare system. Leaving long term care out of healthcare reform represents a gaping hole in what should be sound, logical public policy."

More than 30,000 frontline nursing home caregiver jobs are in jeopardy and the long term care community faces a reduction in business activity by $5 billion the first year these cuts take effect. A recent analysis of the impact of the Medicare cuts by the American Health Care Association also indicates a reduction in labor income by more than $2 billion and a loss of more than 59,000 long term care sector jobs overall.

"The economic impact of these Medicare cuts could be a knock out punch that puts many local economies down for the count," added Gregson. "Healthcare reform should improve outcomes, not cause negative ones."

Nationwide, the long term care industry provides almost two million jobs and accounts for approximately 1% of the Gross Domestic Product (GDP). CoCares emphasizes that stability in Medicare and Medicaid is the key toward ensuring that patients receive high quality nursing home care or care in assisted living settings and supporting businesses are able to provide key services and products that enhance the delivery of care.

The Community Cares Coalition consists of long term care community businesses and organizations across America.