When Lenora Lawrence learned the state wanted to slash reimbursement rates for Medicaid providers, she started to worry.

The 68-year-old woman has called Jan Frances Care Center, a skilled-nursing facility in Ada, home for the past 12 1/2 years. She fears she might have to find somewhere else to live if reductions in Medicaid reimbursement rates force Jan Frances to close its doors.

If that happens, Lawrence doesn’t know where she would live.

“I have no clue, because I have no family — at least here,” she said in a recent interview. “I’d have to go to Oklahoma City or somewhere like that.”

Lawrence said she has lived in Ada for 41 years, so moving to another city would be painful for her.

Across Oklahoma nursing homes are bracing for the potential impact of a 25 percent cut in Medicaid reimbursement rates.

The Oklahoma Health Care Authority has proposed the cuts under the state’s Medicaid program — known as SoonerCare — as a cost-saving measure. The agency is trying to balance its books for fiscal year 2017 in light of the state’s $1.7 billion budget shortfall.

The cuts, which would reduce SoonerCare provider rates to 64.9 percent of Medicare rates, would affect more than 46,000 health care providers across the state. They would take effect June 1.

Potential fallout

The proposed cuts could be particularly devastating for skilled-nursing facilities like Jan Frances Care Center, which has only 37 residents, said administrator Casey Williams. Most of those residents are covered by Medicaid, while the rest have either private coverage or Medicare — the federal health insurance program for people 65 and older.

Williams estimated the facility would lose $28,000 each month — roughly $336,000 a year — if the cuts take effect.

“It’s going to be harmful,” he said.

Williams said Jan Frances would probably close its doors if the cuts take effect, but that decision has not been made yet. He said if the facility does remain open, it would have to find some way to provide the same level of care with fewer dollars.

“The standard of care that we have to provide is set by the state,” he said. “So if we don’t meet that standard of care, a surveyor would come in and they’re going to tag us and they’re going to fine us for not providing that type of care that we’re supposed to. And then if we don’t have the money to provide that care and they fine us, they’re just taking more money.”

A solution?

Over the past decade, Oklahoma’s low Medicaid reimbursement rates have forced more than 112 nursing homes to close, said Tandie Hastings, president of the Oklahoma Association of Health Care Providers. She predicted that another 260 nursing homes would go out of business if the state cuts reimbursement rates even further.

“Any cut is going to be devastating to our industry,” she said in a phone interview. “Even a 10 percent cut shows us closing about 180 nursing homes.”

Hastings said cutting reimbursement rates would force nursing homes to do more with less money, since state and federal regulations bar them from laying off employees or eliminating services.

Lawmakers are considering a measure that could prevent cuts to Medicaid reimbursement rates and keep nursing homes’ doors open.

The Oklahoma Health Care Authority’s proposed solution, known as the Medicaid Rebalancing Act of 2020, would reduce SoonerCare’s enrollment rolls while boosting the number of Oklahomans covered by commercial insurance plans. The measure would require a federal waiver and trigger an infusion of federal dollars for SoonerCare.

The OHCA has also called for raising cigarette taxes by $1.50 per pack, which would generate enough money to stabilize Medicaid provider rates and finance the Medicaid Rebalancing Act.

Raising cigarette taxes would ensure the OHCA would have enough money to continue taking care of Medicaid recipients, Hastings said.

“We’re urging our legislators to find the courage and the money to save our health care,” she said. “This is a short-term solution that would help us now.”

Nursing homes bracing for impact of Medicaid cuts
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