State Fiscal Mess Could Shut Nursing Homes
12/17/08

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Nursing homes and geriatric centers run by UJA-Federation of New York could be so badly hit by the cuts in state Medicaid spending announced this week by Gov. David Paterson that their future may be threatened, a UJA-Federation official warned this week. “There are many reductions in the budget that will impair the ability of UJA-Federation’s agencies to serve people in need,” said Ron Soloway, the organization’s managing director of governmental relations. “Probably the most severe budget reductions are in the realm of health care and will significantly impair the ability of our hospitals, nursing homes and home care agencies to meet the needs of the community. “That means fewer clients being served in home care; it means reduced quality of care in the nursing homes and more importantly it risks the solvency of some of these organizations.” Among the agencies to be hardest hit are the Metropolitan Jewish Geriatric Center in Brooklyn, the Jewish Home and Hospital in Manhattan and the Bronx, Gurwin Jewish Geriatric Center in Commack and others. Cuts in Medicaid would total $3.5 billion, which, when accounting for lost federal matching funds, could mean a net loss of almost $6 billion, he said. In a statewide address Tuesday Paterson and his budget director, Laura Anglin, projected that the state’s unprecedented fiscal crisis was worse than projected months ago because of the continued decline of Wall Street. This year’s shortfall is projected at $1.7 billion, up $200 million from a mid-year projection, and the four-year deficit is now projected at $51 billion, up from $47 billion. The cuts and increased revenue from new taxes and fees would lower that four-year deficit by 88 percent. “With the financial services industry in the midst of an unprecedented crisis, we must fundamentally reevaluate what our state can afford to spend,” said Paterson. “Change is unavoidable.” In his response to the governor, Assembly Speaker Sheldon Silver, like Paterson a Democrat, said the proposed budget “is filled with very painful decisions that will impact schoolchildren, senior citizens, working families, businesses and nonprofit agencies across the state.” Like Paterson, Silver noted that since education and health amount to more than half of state spending, they could not be kept off the chopping block. But he said the Assembly would “insist that this government be deliberate and thoughtful about cuts and not walk away from New York’s historic obligation to the education, safety and health of our citizens ... We will protect our most vulnerable citizens.” While the cuts to Medicaid would be drastic, New York would remain the state with the highest per capita Medicaid spending in the nation. “We are going to reform reimbursements for nursing homes and home care to provide high-quality care,” said Anglin. “The right care for the right price at the right setting.” Education spending would see the most drastic cuts under the governor’s budget, with $700 million in direct cuts as well as reduction in future spending. Anglin said the state, which annually spends about $14,000 per pupil — the national average is $9,000 — would keep its commitment to increasing school aid by $7 billion, but the funds would be phased in over eight years instead of four. A reduction in aid apportioned to non-public schools for busing, textbooks and other material and services will have an effect on institutions already reeling from decreased fundraising and increased applications for tuition scholarships. “A limited but important amount of funding goes to non-public schools,” said Soloway. “Some of the Jewish schools will definitely see fewer reimbursements.” After-school programs run by social service agencies may also suffer, he added. But Soloway said he was hopeful that a federal stimulus package that is likely to be the first bill signed by President-Elect Barack Obama will provide some relief, particularly in its recalculation of the Medicaid reimbursement formula to states. “Since the final state budget will be passed before March 1, they will probably try to incorporate that money, so that may mitigate [the cuts] somewhat.” William Rapfogel, executive director of the Metropolitan Council on Jewish Poverty, said reduced funding for home care would be painful not only to clients but workers who rely on long hours to earn a sufficient weekly wage. “I don’t think any of us could have imagined this kind of scenario,” said Rapfogel. “Just when you think it just couldn’t get worse, with the budget cuts, you have the Madoff horror [impacting on charitable groups],” referring to the financial scandal involving financier Bernard Madoff. “With everything, it’s the worst-case scenario.” Rapfogel and Soloway both said the full impact of the cuts could not be assessed until their agencies combed through hundreds of pages of documents. Then comes New York City’s budget, which will have rely on $1 billion less in state aid. “On the fringes, there are a lot of programs that are not as high profile,” said Rapfogel. “It’s hard to see the impact on them, until the budget is further analyzed. It’s only the big-ticket items that we’ve identified now.”

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