What President Obama’s re-election means for the future of long-term care

The re-election of President Obama and the retention of a Democratic majority in the Senate point toward a continuation of current policies and initiatives pertaining to the long-term care (LTC) industry. But control of the U.S. House of Representatives remains strongly with the Republican Party, adding the factor of party-based conflict among the legislature, much like after the presidential election in 2008.

However, the looming deadlines within the 2010 Affordable Care Act (ACA)—including sequestration and the tax increases of the so-named “fiscal cliff” should Congress fail to act by year’s end—mean lawmakers and the President still must work together on a host of challenges in the next two months.

No one can predict how Congress and the LTC industry players will choose to form their conjoined solutions, or how those solutions will affect skilled nursing facilities and other LTC operations, including the extent of the effects on Medicare. Some of the possible compromises already voiced include certain Medicare reductions and perhaps an increase in the eligibility age for beneficiaries from 65 to 67, among other proposals.

Yet, now that the Presidential election is over, many political entities no longer have reason to campaign heatedly against each other on national healthcare issues, leading to hopes of better bipartisan communication and cooperation down the road. “There is intense pressure in Washington to find a solution,” says Bob Gatty, founder and president of G-Net Strategic Communications, Sykesville, Md., and contributing writer to Long-Term Living. “The early tone of [post-election] comments from President Obama and House Speaker John Boehner indicates that there may be a possibility of compromise between the [Republican-controlled] House of Representatives and the White House.”

Now that the nation’s voters have had their say, it’s time to return to the hard work of working together on the issues troubling the U.S. healthcare system, says American Health Care Association President and CEO Mark Parkinson, in a statement following the elections. “While we know that the President and our newly elected Congress must find ways to reduce federal spending and fund a wide variety of programs, now is the time to take a hard look at meaningful reforms to solve the issues that face both the Medicare and Medicaid programs. Stable Medicare and Medicaid funding will help ensure America’s seniors continue to have access to high quality long term and post-acute care.”

Leading long-term care organizations also are ready to move beyond the election rhetoric and return to reform initiatives already underway. “I think our course is now known,” LeadingAge President and CEO Larry Minnix told Long-Term Living. “We’re now beyond political posturing. We’ve got to get into actual implementation of [the ACA]. There are models that people are working on that will work.”

AS THE ELECTION DUST SETTLES

The LTC industry has long complained that continuing reductions in Medicare are jeopardizing patient care and that increases in funding are needed to overcome the failure of Medicaid to adequately cover the cost of serving those patients. However, given the pressure to deal with the federal budget deficit, it is rather unlikely that such increases will be approved by Congress.

Post-election frustrations abound among some in the LTC industry, a care sector that gets a huge amount of its reimbursements from Medicare.  William V. Day, president of St. Barnabas Health System in Gibsonia, Pa., says he’s worried that as many as 50 percent of hospitals and nursing homes will close because of Medicare cuts. “Both parties project that $716 billion will be cut from Medicare to use in Obamacare,” he told Long-Term Living. “I doubt that older Americans realize the impact Obamacare will have on their lives and their health in the future.”

Day views the re-election of President Obama as a great victory for those in favor of increased government control of healthcare: “Regulations and inspections in the healthcare delivery system will be dramatic over the next four years,” he predicts.

The LTC space should prepare for more regulatory activities, agrees Caroline J. Berdzik, Esq., partner, Goldberg Segalla LLP. “We will continue to see more rule-making from the Department of Labor, OSHA and EEOC that will negatively impact nursing homes and result in increased labor costs and additional employment litigation defense costs,” she says.

Berdzik also suggests that “a flurry of regulations under the ACA will be issued to gear up for 2014, and operators will need to pay very close attention, as these regulations will impact areas such as compliance, increased transparency disclosures and background checks of employees. It is highly unlikely that ACA will be repealed now, so operators will have to strategically prepare for these changes and also evaluate, if they have not done so already, how this will affect health insurance offerings to their employees. You may have employers looking to significantly reduce hours of employees to avoid increased health insurance costs. However, any proposed action will need to be analyzed in conjunction with maintaining excellent quality and continuity of care.”

Other LTC industry leaders are cautiously optimistic about Congress’ ability to iron out the healthcare challenges, hoping that efforts can focus on improving quality of care. LeadingAge’s Minnix comments on the LTC industry shift toward quality outcomes: “You’ve heard ‘cash is king?’ Well , now ‘quality is queen,’ and the queen is the boss now,” he says. “So we’re going to work to help people define and measure, and to stand accountable for their quality, because that’s the only thing that will earn the public trust.”

Another key post-election issue is how Congress will choose to deal with the upcoming physician Medicare payment reductions, currently scheduled to take place on January 1. Although another temporary Congressional “doc fix” is possible, it would just add to the overall federal budgetary pressures that Congress is already facing, Gatty notes.

The American Medical Association remains committed to finding a different solution, one that is focused on rewarding physician leadership in the mission of quality outcomes within patient-centric healthcare delivery. “It is time to transition to a plan that will move Medicare away from this broken physician payment system and toward a Medicare program that rewards physicians for providing well-coordinated, efficient, high-quality patient care while reducing health care costs,” the AMA wrote in its response to the election results.

THE ROLE OF THE STATES

The U.S. Congress isn’t the only law-making body that has work to do under the ACA deadlines.  Each state has until Nov. 16 to declare which of the three Health Insurance Exchange (HIX) models will be used within the state.

After the June 28 Supreme Court decision that allowed states to choose whether or not to participate in Medicaid expansion, six states—Florida, Georgia, Louisiana, Mississippi, South Carolina and Texas—had vowed not to participate in Medicare expansion. In yesterday’s Presidential election, five of those six states voted Republican, with Florida still undeclared as of this posting.

Yet, nearly all states have been attending policy meetings on forming state exchanges, says Nancy Taylor, JD, co-chair of the Health and FDA Business Practice at Greenberg Traurig, LLC, Washington, D.C.  Among the three HIX models, she says, most states are planning state-federal partnership exchanges, while 10-15 states are considering purely state-certified exchanges. One or two states may opt for a federally-facilitated exchange model, where the state exchange will be operated by the federal government for an initial time period, she adds.

DOWN IN THE LTC TRENCHES

Meanwhile, LTC facilities are busy getting ready for 2013 and 2014, regardless of the election. While care coordinators deal with Meaningful Use compliance, therapy caps and Medicaid, LTC facility owners are grappling with their corporate decisions concerning the new employee benefits mandates within the ACA.

“There’s so much going on that it’s almost overwhelming,” Taylor says, although she clarifies that LTC facilities shouldn’t plan on any postponements to current deadlines. “Many nursing homes are pretty up to speed.  But we need to get the employer issues stabilized for nursing homes so they have a pathway on how to comply with the law, and then they can deal with all their reimbursement issues. Over the next few months, we’ll see more guidances and regulations, so the long-term care community knows how to comply with the employer requirements.”

When it comes to reimbursements, LTC facilities will have to wait to see how the influx of new beneficiaries affects the fee schedules. “I think with an Obama presidency we can expect that the fee schedules will be revisited to try to neutralize the financial impact of the significantly larger number of people who will be receiving services,” says Eli Pick, president of Post Acute Innovations, Elmhurst, Ill. “[The adjustments] will either be way too low or the reductions won’t be anywhere near enough to account for the expansion of the population, and it’s usually the latter—underestimating the volume of people to be covered. So, the options most likely won’t be able to account for the increased number of people who will receive services.”

THE ROLE OF TECHNOLOGY

Championing the use of technology infrastructures within long-term care—including electronic medical records, ePrescribing and streamlined transitions of care—has long been touted as a pathway to reduced healthcare costs and better care quality. Many of the initiatives begun under the 2009 Health Information Technology for Economic and Clinical Health Act (HITECH) would have been viewed as in dire jeopardy for continued funding had President Obama not won the election, but healthcare technology thought leaders now hope the industry can finish the various initiatives already underway.

“Cuts to long-term and post-acute care providers and the lack of incentives to assist them in upgrading their technology make it difficult to achieve interconnectivity and interoperability in a healthcare system that is to have a person-centric ,electronic, longitudinal-care focus ,” says John Derr, RPh, co-founder of the Long-Term and Post-Acute Care Health Information Technology Collaborative (LTPACHIT) and health information technology strategy consultant to Golden Living. “We need to encourage pro-action, prevention of episodic incidents and higher quality clinical outcomes.”

LeadingAge’s Minnix agrees: “We know that the current approach of [LTC] service delivery is fragmented and isn’t holding its own weight financially,” he says. “So we’re going to be emphasizing integrated models of service in every community—things like housing with services, managed care approaches where our members work with hospitals and doctors and how technology can help with all that.”

THE ATMOSPHERE OF CHANGE

Industry leaders are calling for meaningful reforms to solve the Medicare and Medicaid issues and pledge to work with the President and Congress to find viable solutions. There’s no doubt that many more reform discussions will take place, especially among the new Congress that takes office in 2013, Gatty says.

Meanwhile, most LTC facilities are preparing for moving ahead into a new world of integrated care delivery with acute care, home care, assisted living, and beyond. “We will definitely see a lot of changes,” Tim Dressman, executive director, St. Leonard Franciscan Community, Centerville, Ohio, told Long-Term Living. “I just hope they [the federal entities] don’t cut funding so drastically that the person is taken out of the healing process and healthcare becomes nothing more than an assembly line.”

During the ongoing regulatory and legislative processes, it will be essential for all LTC industry players—from small facilities to large ones—to get involved, notes LeadingAge’s Minnix. “While Medicaid obviously needs to be changed, you can’t do it on the backs of vulnerable people,” he says. “We believe our members will do their part on innovation. A number have done things that show great promise for improving quality and reducing costs, but those things need time to incubate. We believe that over the next four years, we’ve got time to begin to see the fruits of those solutions.”

Bob Gatty, founder and president of G-Net Strategic Communications, Sykesville, Md., contributed to this report.

I Advance Senior Care

I Advance Senior Care is the industry-leading source for practical, in-depth, business-building, and resident care information for owners, executives, administrators, and directors of nursing at assisted living communities, skilled nursing facilities, post-acute facilities, and continuing care retirement communities. The I Advance Senior Care editorial team and industry experts provide market analysis, strategic direction, policy commentary, clinical best-practices, business management, and technology breakthroughs.

I Advance Senior Care is part of the Institute for the Advancement of Senior Care and published by Plain-English Health Care.