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Nursing homes say New York's Medicaid re-calculation will cost them $246 million

Tom Dinki/WBFO News
Chris Keonig (far right), president and CEO of Niagara Lutheran Health System, speaks Wednesday at Garden Gate nursing home about New York state's Medicaid change.

Nursing homes are speaking out against New York state’s Medicaid re-calculation they say will cost them millions of dollars in funding.


Nursing home officials and advocates, as well as their state lawmakers, gathered at Garden Gate nursing home in Cheektowaga Wednesday to urge the New York State Department of Health to reconsider the recent change to the Medicaid reimbursement model.


They warn that while the move will save $123 million in Medicaid costs from the state budget, it will take away $246 million from nursing homes, as the federal government matches the state’s Medicaid payments.


This includes more than $4.3 million in cuts for the 10 nursing homes in the state’s 63rd Senate District, as well as more than $2.9 million for the 11 nursing homes in the 59th Senate District.


“This is likely to lead to more bankruptcies and more sales of facilities,” said Chris Koenig, president and CEO of Niagara Lutheran Health System, whose Greenfield Health and Rehabilitation Center in Lancaster is estimated to lose $209,000, “and that’s going to lead to more Western New York residents looking for new homes in already overtaxed system that is already near a breaking point.”


The 2019-20 state budget called for the Department of Health to create a workgroup to explore changing the way nursing homes are reimbursed for Medicaid in order to “promote greater accuracy” and “target abuses” within the system. 


The department has decided to revise the case-mix index (CMI), which the state uses to determine Medicaid reimbursements. 


A nursing home’s CMI was determined by taking a snapshot of its patient care in January and July of each year. However, the new model determines CMI for this latest reporting period by averaging all of a nursing home’s assessments between Aug. 8, 2018, and March 31.


“This puts the nursing homes at a disadvantage because they're going to be evaluated for reimbursements using old data,” said Assemblymember Monica Wallace, D-Lancaster. “So we’re just asking the Department of Health to be fair about this. It’s fine if you’re going to change this reimbursement method, but give nursing homes a chance to adjust to it and don’t apply it retroactively.”


Assemblymember Pat Burke, D-Buffalo, agreed the CMI formula needed to be changed, but said the Department of Health has gone about it in the wrong way.


“This is so unlike New York — a regressive policy like this,” he added.


Jeffrey Hammond, a spokesperson for the Department of Health, said in an email the CMI change will ensure nursing homes are reimbursed accurately and fairly, and that the department does not expect any disruptions to nursing home residents and their care.


However, advocates argue the reduction will impact care since it could lead already struggling nursing homes to reduce services and layoff workers.


Asim Johnson of the Healthcare Education Project, an advocacy group created by 1199SEIU United Healthcare Workers East and the Greater New York Hospital Assoication, noted older adults are the fastest growing population in the state. Currently about 3.2 million New York state residents are 65 and older.


“Our fellow citizens need quality care options and shouldn’t have to fear that their access to quality care is in jeopardy,” he said.


Koenig urged those concerns about the cuts to contact their local state representatives.

“We ask for the support of the Western New York community to make our voices heard and that these budget savings should not come from the sickest in our communities,” he said.

Tom Dinki joined WBFO in August 2019 to cover issues affecting older adults.