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 Congress Drops Provider Tax Threshold Reduction

A proposal from House and Senate Republican leadership to fund an extension of low-interest student loans by lowering the Medicaid provider assessment (also known as a provider tax) threshold was abandoned this week, much to the relief of long term care advocates.

The proposal, which would have reduced the maximum Medicaid provider assessment rate to 5.5 percent, was staved off after the American Health Care Association (AHCA) launched an opposition campaign earlier in the month.

“Long term and post-acute care providers are relieved that Congress found a more responsible way to fund the majority of the Stafford loan program,” said Gov. Mark Parkinson, president and chief executive officer of AHCA, in a statement released today.

“Our work is not done, however. We’ll continue to fight and make the case to lawmakers that provider assessments are an important tool our members rely on to care for seniors in their centers.”

AHCA sent a June 6 letter to House and Senate leaders that said the proposed cut targeted a sector already battered by rounds of federal and state budget cuts and threatened nursing care centers’ “ability to provide care to vulnerable seniors.”

Furthermore, the measure “would do nothing to reduce the cost of health care or make Medicaid more efficient,” said the letter from Parkinson.

The letter pointed out that long term care centers provide a “meaningful job base” in their communities, employing more than 3.2 million Americans nationwide.

About 63 percent of nursing facility residents rely on Medicaid to fund their care. Providers lose nearly $20 per day on each Medicaid resident, adding up to a $6.3 billion loss nationwide, the letter said, citing the annual report by consulting firm Eljay on the shortfall in nursing facility Medicaid payments.

Furthermore, a recent state budget survey by the National Governors Association and the National Association of State Budget Officers found that to contain spiraling Medicaid costs, 33 states reduced and/or froze provider payments in 2012, and 21 will do so next year.

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