FOR IMMEDIATE RELEASE:
May 17, 2006
Kate Philips
717-783-1116

Bill would have reimbursed nursing homes
at rates 150 percent higher than other health care providers.

HARRISBURG, PA - Governor Edward G. Rendell today vetoed a bill which could have increased reimbursements to nursing homes at a rate 150 percent higher than other health care providers including doctors and hospitals and could have left a gap of more than $100 million in the proposed 2006-07 state budget and caused increased state spending.

In his veto message to Senate Bill 997, the Governor reminded the General Assembly that he had committed to a "pay as you go" budget process for Pennsylvania and has repeatedly said he would not sign legislation that either significantly increases spending or reduces revenue without a specific plan to pay for it.

"Clearly, nursing homes are an important component of our long term living system," the Governor wrote. "Pennsylvania has treated its skilled nursing facilities very well, particularly when compared to other states. Between 2000 and 2005, nursing facility per diem payment rates in the commonwealth increased an average of 4.9 percent per year for a total increase over that time of nearly 30 percent. National comparative surveys have consistently ranked Pennsylvania nursing home payments among the highest in the nation. For example, in a 2004 AARP Policy Institute Study, Pennsylvania per diem payment rates were the 8th highest in the country.

"While my administration has proposed a 4 percent increase in rates here in Pennsylvania, the federal government has actually frozen payment rates and only one state of 23 that responded to a recent survey was proposing a higher percentage increase than what I proposed. In fact, 11 states and the federal government were proposing a rate freeze or a rate reduction for 2006-07.

"At the same time, Pennsylvania has been aggressively expanding programs and services that allow seniors and those with disabilities to remain in their homes and communities, which is where they overwhelmingly choose to live. In fact, the number of people served in PDA home and community based waiver programs has grown more than 75 percent since 2003 and I have proposed funding to serve an additional 2,800 individuals in the upcoming fiscal year. Likewise, home and community based services for people with disabilities have experienced similar increases in both funding and number of people served. As a result, we have made great progress in allowing seniors and the disabled to live their lives in dignity, by receiving quality services where they need them and want them."

The Governor referred to a letter he received last week from Fred Greisbach, the director of Pennsylvania AARP, urging him to veto SB 997.

"We are particularly concerned that nursing home funding increases that would occur as a result of SB 997 may come at the expense of home and community-based care programs currently financed through the Department of Public Welfare¹s Medicaid waiver program," Greisbach wrote. "While the number of Pennsylvanians receiving state assistance for home and community-based care has risen dramatically in recent years, the commonwealth still lags behind much of the United States in funding alternatives to nursing home care."

The Governor noted that AARP sent him a letter requesting he veto this legislation, writing that, "We are particularly concerned that nursing home funding increases that would occur as a result of SB 997 may come at the expense of home and community-based care programs." AARP also said that SB 997 also would prevent implementation of changes designed to rebalance the long term care system, consistent with the clear preference of consumers to receive needed services in their homes and communities.

"Despite the fact that I am now vetoing this legislation, I want to emphasize our willingness to continue negotiating changes in the nursing home payment system that will provide a reasonable increase in payment rates, enhance consumer choice and efficiency in the long term care delivery system and provide appropriate services for seniors and those with disabilities."