INDIANAPOLIS – Free-market concerns didn’t stop the Senate Health and Provider Services Committee from voting 8-4 Wednesday to approve a five-year moratorium on adding nursing home beds in Indiana.
Sen. Patricia Miller, R-Indianapolis, said she filed Senate Bill 173 because Indiana’s current occupancy rate for skilled nursing home facilities is 74 percent, with 13,000 empty beds.
For about 80 percent of residents, expenses are paid through Medicare or Medicaid.
Scott Tittle, president of the Indiana Health Care Association, said a five-year stabilization program will reduce growth to the state Medicaid budget and bring stability to the industry.
The bill does not affect assisted living centers or retirement communities.
Under the bill, projects already under development – about 17 around the state – can move forward. And a nursing home can be replaced in a county if there is no net increase in beds. Remodeling is allowed as well.
Indiana has 520 nursing homes. The national average for occupancy rates is about 85 percent.
Tittle explained that many nursing homes set aside most of their beds for Medicaid patients at an average daily rate of $175, paid by the state.
The remaining beds in a facility are split between Medicare and private-pay residents at much higher rates.
He said nursing homes rely on the other patients to balance out the loss on Medicaid beds in order to remain open and profitable.
But Tittle said new nursing homes are opening around the state that don’t serve the Medicaid population and lure the Medicare and private-pay patients away from other facilities. These new nursing homes also can pay their staffs higher salaries, which pushes up costs for all facilities and results in high turnover. Pat Boyle of Miller Health Systems, which operates 32 nursing homes and assisted living centers in Indiana, said existing nursing homes are wary about investing in communities without a moratorium in place.
He said that some of the newer nursing homes offer larger televisions and private rooms to attract the lucrative patients, threatening the balance that facilities serving Medicaid patients count on to stay profitable.
Supporters said the state doesn’t need new nursing home beds at a time when the occupancy trend is going the opposite way with more Hoosiers staying in home and community-based care.
Westfield Mayor Andy Cook testified against the measure, saying lawmakers should allow the industry to operate in the free market.
He said that there are also empty restaurants in the state – largely because of bad service, outdated facilities or a bad location.
This just doesn’t sound like my state of Indiana – a free-market, free-enterprise state, Cook said.
Several construction companies also opposed the bill out of fear of losing millions in investment and jobs for Hoosiers.
Colleen Matthews, who operates a new nursing home in Crawfordsville, said, We are giving people choices of where they want to go. And she said that competing facilities in her area were forced to make long-needed renovations and changes that are good for the residents.
Miller said several times that Indiana’s overall quality-of-care survey results for nursing homes have improved in recent years, and many older facilities have high scores.
Sen. Ryan Mishler, R-Bremen, said that as a business owner, he typically would be against this kind of intrusion. But he said that although building contractors work in a free-market system, operators of the nursing homes do not because the government tells them how much money they get for Medicaid and Medicare patients.
The bill now moves to the full Senate.