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Looming Medicaid Cut Worries Providers and Beneficiaries

Proposed reduction could hurt most vulnerable

Angels At Home help Andy Dobbs continue to live independently.

Misty Keasler

From left, Anthony Gomez and Jennie Baird of Angels At Home help Andy Dobbs continue to live independently. Proposed state cuts in Medicaid payments could jeopardize his home care.

En español | Without daily visits from a home health care worker, Andy Dobbs, a quadriplegic, would be forced to live in a nursing home. As he talks about the possibility, his voice begins to crack with emotion and he apologizes before taking a moment to regain his composure.

See also: House Republicans propose remake of Medicare, Medicaid.

Twice a day for more than a decade, a worker from Angels At Home Inc., a home health care agency in Corsicana, helps Dobbs, 40, bathe, dress, cook and shop. Dobbs is able to afford the service with help from Medicaid, but he may face a harder time finding an agency willing to take Medicaid beneficiaries if Texas legislators approve deep cuts to the program.

"[Angels At Home] keeps me out of a nursing home," Dobbs said. "I have no other family support."

Facing a $27 billion shortfall in the 2012-2013 budget, legislators are considering a 10 percent cut in Medicaid payment rates to providers. That would reduce state spending by $1.6 billion and mean a $2.2 billion loss in matching federal funds. ­ Medicaid is a state-federal program that provides health coverage to low-income families, pregnant women, children, people over 65 and people living with disabilities.

"We think this would be a disaster," said Trey Berndt, AARP Texas associate state director for advocacy. "We need decent rates across the spectrum [of long-term care] to continue this balanced system that we have."

A final budget bill is typically sent to the governor in late May.

About one in eight Texans, or more than 3.3 million residents, depends on Medicaid for health care or long-term care support.

Only 42 percent of Texas physicians take Medicaid patients, and that could drop even further with a 10 percent rate cut, said Texas Medical Association President Susan R. Bailey, M.D.

In rural Lampasas, family practitioner James E. Cain, M.D., said a cut would make it harder to find specialists willing to see his Medicaid patients. Because Cain also receives financial assistance from the state's rural health program, he's better positioned to absorb a Medicaid rate cut. But if that assistance were eliminated, he said, he would have to reconsider taking new Medicaid patients.

"If I closed my doors to them, there'd be no other place for them to go," said Cain, who runs Lampasas County's only family practice.

Tim Graves, president and CEO of the Texas Health Care Association, which represents almost half of the state's 1,100 nursing homes, said the proposed rate cut could result in "closures, staff layoffs — it's a very ugly picture."

Graves warned that some nursing homes would have to close if rates are cut. If that happened, "obviously the most important question becomes 'Where would these folks go?' " While some could stay with family, Graves predicted others would be forced to seek even more costly hospital care.

Next: Home- and community-based care programs also in jeopardy. >>

There are about 550 nursing homes in Texas with a Medicaid population of 70 percent or higher, Graves said. Texas ranks 49th in the nation in Medicaid reimbursement rates to nursing homes.

The almost 125,000 Texans in home- and community-based care programs are also in jeopardy. A 10 percent cut would mean some agencies could barely afford to pay workers minimum wage; others would be forced to close their doors, said Anita Bradberry, executive director of the Texas Association for Home Care & Hospice.

The fallout threatens to topple a well-balanced long-term care system that has helped residents stay in their homes and stabilized growth among nursing home populations, she said. The cost per person in a community-care program is a third to half that of a nursing home resident.

John Gabbert, CEO of the home health care agency Red River Health Care Systems in Denison near the Oklahoma border, is optimistic that the cuts won't happen, predicting that "sanity will prevail before it all shakes out."

"But if they do cut, we're in chaos," Gabbert said. "All bets are off."

In Corsicana, Angels At Home administrator Jennie Baird said the Medicaid reduction could force her to cut employee benefits and pay, which isn't much more than minimum wage now. "I feel passionate that we've got to be able to find a solution," she said. "Our patients don't have any other options."

To contact your legislators about plans to cut spending on long-term care, call 1-888-633-3650 toll-free.

Kim Krisberg is a freelance writer living in Austin, Texas.

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