Tough Issues Facing Michigan Nursing And Rehabilitation Communities

This article was originally published in the Health Care Association of Michigan and Michigan Center for Assisted Living PROMOTING EXCELLENCE July Newsletter.  It is written by HCAM CEO Dave LaLumia.


The Michigan legislature has adjourned for the summer but the tough issues facing nursing and rehabilitation communities are not taking a break. Congress is considering massive cuts to both Medicare and Medicaid.

Significant work remains to be done on the FY2012 state budget that will have an impact on the Medicaid program and the Department of Community Health has announced next steps in moving to managed care for dual eligibles.


The current federal debt ceiling expires the first week in August. Republicans are withholding support for raising the debt ceiling while demanding cuts in federal spending. The U.S. Senate recently cancelled its summer break to work on this issue. In a meeting with House Ways and Means Chairperson Dave Camp earlier this spring, he indicated that negotiations on the debt ceiling would dominate all else until it was resolved. This was a highly accurate prediction on the Congressman’s part. Negotiations continue as we are within a month of
the deadline.

Most Republicans have ruled out tax increases to reduce the deficit. President Obama has rejected the idea of Medicare vouchers, Medicaid block grants or any rollback of the new health care law. Cutting federal entitlement programs such as Medicare and Medicaid is under consideration. CMS has issued a prospective payment rule which would cut Medicare rates paid to nursing facilities by 12.8%. AHCA has issued a call to action urging members to ask Congress to reject this rule. New information is emerging that Medicaid is also the subject of severe cuts. If you have not specifically sent an email to your Member of Congress, now is the time to request that they resist cuts to
Medicare and Medicaid that will limit care to beneficiaries.


Just prior to their adjournment last week, the state Senate enacted the 1% tax on health care claims. The tax is expected to raise $400 in new funding. This will draw down $800 million in federal Medicaid funding — a $1.2 billion total. This revenue was included in the FY2012 budget which has already been adopted. The actual assessing of the tax, however, requires a separate piece of legislation. This was a tough sell in the Senate and the same is expected in the House. Legislators are reluctant to vote for taxes even though the new tax and the revenue it produces have already been included in the FY2012 budget. The House is expected to be in session for at least one day in both July and August. They may take up the bill at that time. HCAM is strongly supporting this bill. Without its passage, the Medicaid program is in trouble and cuts will likely be required. This will be an important issue to speak with your State Representatives about over the summer.


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