A VICTORY FOR NURSING HOMES? To save funds, Md. plans to move some Medicaid patients


A plan by the state's top health official to pay nursing homes to care for ventilator-dependent patients on medical assistance has sparked a bitter fight with the specialty hospitals that now care for the bulk of those patients.

Regulations being drafted by the state Department of Health and Mental Hygiene would pay nursing homes hundreds of dollars a day more than the average $85 they now receive for Medicaid patients. The regulations also would specify standards care for those patients.

The fight foreshadows the jockeying that is sure to come as Maryland and the nation struggle to foster competition among health care providers and find cheaper alternatives.

The proprietary nursing-home industry has sought the higher payments for two years, asserting that even with the price increase, nursing homes could provide the care at one-half to two-thirds the price now charged by chronic-care hospitals. The plan would also open the door to nursing homes to compete for patients who require other sophisticated medical care.

But even before regulations are published and circulated for public comment, representatives of the chronic-care hospitals have launched a lobbying campaign among top state legislators to squelch the change, arguing that it would not save the state money and could even, without hospital-level standards, kill patients.

The new rules, due out in September, must be approved by a joint Senate-House committee, which reviews regulations before they take effect.

Private chronic-care hospitals received $28.3 million in state Medicaid payments last year. In Maryland, the average stay is 73 days.

Stanford A. Alliker, president of Levindale Hebrew Geriatric Center and Hospital, speaking for his own facility as well as for Deaton Specialty Hospital and Home, the Johns Hopkins Health System and Dimensions Health Corp. of Prince George's County, said the change would produce an excess of beds for ventilator patients in central Maryland, where there is no need. That, in turn, would drive up the cost of such care and reduce its quality, he said.

But that view was disputed by state officials.

"I think what you are seeing is a display of greed, and that is probably one of the causes of the health care crisis this country has," said Nelson J. Sabatini, secretary of health and mental hygiene. He described the chronic-care hospitals as a collective "dinosaur" that the state has no business protecting.

"The issue is, I am trying to find more efficient ways to care for people," he said. "Otherwise, Medicaid will drive the state into bankruptcy."

Mark Leeds, chief of the health department branch that writes Medicaid reimbursement rules, said he expects that the state would pay nursing homes $350-$450 a day to care for ventilator )) patients. Chronic hospitals now charge an average of $600 a day, he said. He estimated that there are about 60 ventilator beds in use at any time.

But officials at chronic-care hospitals question the evidence put forth by nursing homes to support their contention that they could do the job less expensively. A study by Deaton and the Johns Hopkins Geriatric Center lambasted clinical and financial estimates produced by a report prepared by a consultant to the nursing home industry, calling the assessments of patient needs "wrong" or "grossly understated." A major concern is that nursing homes that cannot now meet minimum standards would be allowed to provide unregulated care.

Roger Lipitz, chairman of Meridian Healthcare Inc., a Towson-based nursing-home chain, and a force behind the movement for higher reimbursement, said he would not support it without new standards for nursing home ventilator care -- changes that would limit the nursing homes able to enter the field because they would require investment in equipment and staff training.

Higher reimbursement levels would pave the way for companies with access to capital, like Meridian, one of the country's largest nursing-home chains, to open units to care not only for "vent-care patients," as they are called, but also for other patients now cared for in hospitals.

Meridian, for instance, is negotiating with managed-care companies for patients who now go to chronic-care hospitals, Mr. Lipitz said.

Maryland's system of hospital regulation has kept price increases below the U.S. average even while insuring care for people who cannot pay. But Mr. Lipitz contended that the system is not as efficient regarding chronic-care hospitals, which he said charge an "unrealistically high rate because they are the only place Medicaid can buy it."

Meridian, he said, could provide the care for under $400 a day, excluding drugs.

Mr. Sabatini is moving to change the rules before the Health Resources Planning Commission finishes a study of care options in chronic hospitals. Mr. Alliker of Levindale said the state health department is ignoring an established industry in favor of nursing homes that must retool at heavy cost.

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