The chair of the House Aging and Older Adult Services Committee is calling for a grant program to help nursing homes make repairs and renovate their facilities. Nursing home operators say that the state’s Medicaid reimbursement rates are too low so they can’t afford to make the repairs. Proponents say they are modeling the idea after a grant program used to help public schools make building repairs.

The effort comes as the state’s seen about 30 nursing homes close since the COVID-19 pandemic even as the number of senior citizens swells and is projected to continue growing.

The Department of Health’s nursing home facility locator listed 665 nursing homes on Tuesday, including 14 county-run nursing homes and seven state-run facilities.

There are 2.47 million Pennsylvanians over age 65, including almost 600,000 age 80 or older. By 2030, the number of Pennsylvanians over 80 is expected to approach 800,000 and by 2040, more than 1 million Pennsylvanians will be over 80, according to projections by the Center for Rural Pennsylvania.

“I’ve conducted hearings, I’ve gone to hearings, where we’ve learned that our nursing homes have been running in the red for years and years,” Rep. Maureen Madden, D-Monroe, said in a Tuesday interview with CapitolWire/State Affairs.

Madden, the majority chairwoman for the Aging and Older Adult Services Committee, announced plans for the grant program legislation on Feb. 26. The legislation has not formally been introduced. Madden said there is no specific funding amount for the proposal, though she believes the state should invest an amount comparable to the $100 million allocated for school building repair grants.

Financially struggling nursing homes don’t have the resources to make repairs, even those that could be critically important, she said.

“We understood quite a while ago that it was important to provide a dedicated capital grant program for our schools, and that aging infrastructure,” Madden said. “Why wouldn’t we do that same thing for our nursing homes?”

Madden said she thinks nursing homes need help making renovations and repairs, regardless of whether they are owned by private companies or nonprofit organizations.

She said, however, that lawmakers could consider limiting the grants to nursing homes that take patients who are Medicaid beneficiaries. The Department of Health’s nursing home locator database on Tuesday showed that almost 60 nursing homes no longer provide care to patients who are Medicaid beneficiaries.

“We’d be happy to help everyone, but if we only have a finite amount of dollars, then we have to go for the nursing homes that are accepting Medicaid, because they’re accepting our most vulnerable seniors, our low-income seniors,” she said.

Medicaid woes

Pennsylvania is one of just five states — along with Idaho, Maryland, Nevada and New Hampshire — that uses a budget adjustment factor that reduces the reimbursement rates paid to nursing home operators. Through the adjustment factor, the state measures the nursing homes’ expected per diem rates against prior state averages.

These cuts impact 92% of nursing homes and the nursing home group says that 40% of nursing home operators are paid less than 80% of their costs to provide care.

“The majority of the residents that we serve are on Medicaid, so the ability to reinvest into physical plant is challenging,” Michael Jacobs, president and chief executive officer of the Pennsylvania Health Care Association, told CapitolWire/State Affairs. “So we are trying to create a vehicle by which long-term care facilities are able to reinvest into their physical plant, because right now, they devote everything they have to the care, to people. The largest expenditure that we have is for people — caregivers, nurses.”

Madden said the push to provide funding to help nursing homes make needed repairs and renovations would not replace the need to re-examine the budget adjustment factor, which is set to expire on June 30. The mechanism has been in place since 2005 but it has been repeatedly renewed since then.

State Sen. David Argall, R-Schuylkill, has announced plans for legislation that would set a floor that would prevent the budget adjustment factor from providing nursing homes with less than 90% of the rate they would have gotten if it weren’t in place. Similar bills have been introduced in the state House in past sessions, as well.

“I think we need to do both (provide grants and address the budget adjustment factor),” Madden said. “I think we give them more dollars in which to operate and help them so that we can get up to speed or we can do better than that. We can provide really state-of-the-art facilities where seniors don’t feel like they’re in an institution.”

By the numbers

Statistics about Pennsylvania nursing homes

— 665 skilled nursing homes

— 418 owned by for-profit companies

— 226 owned by nonprofit organizations

— 14 county-owned

— 7 state-owned

— 59 do not accept Medicaid