It's a Minnesota party role reversal on nursing home funding

Conference-committee season starts this week at the Legislature, with negotiating teams configured in their predictable partisan pattern — Senate DFLers asking for more spending and House Republicans seeking smaller increases, if that, for the sake of bigger tax cuts.

With one big exception.

Minnesota's 350 care centers — nursing homes, in common parlance — are in for a $138 million two-year increase under the House's budget. The Senate's version and DFL Gov. Mark Dayton have them down for a comparatively stingy $25 million in new money plus $24 million more already promised under current law.

What explains this anomaly? I checked with Republican Rep. Joe Schomacker, a 29-year-old third-termer from Luverne who heads the House Aging and Long-Term Care Policy Committee. The up-and-comer answered my query with a down-home story.

Two years ago this month, a nasty ice storm paralyzed much of Schomacker's district. It did its worst in Hills, population 700, situated near the spot where Minnesota, Iowa and South Dakota meet. (And where, interestingly, it's not very hilly. The town is named after the 1890s president of the Sioux City and Northern Railroad, Frederic Hills.)

"The roads were closed because of the ice," Schomacker related. "The telephone lines were down; power lines were down; cellphone tower went down; radio towers went down. There was no way to communicate with the outside world, and there was no way to get in.

"For a lot of people in that town, the only warm place there was to go was the nursing home. There was a backup generator there; they had extra beds; they had extra room. They brought people in. It really is part of the community."

Unfortunately, many of them are in financial trouble, due in no small part to decisions made by the Legislature. The cost of care for a population that is both growing in number and growing sicker has outstripped the state's willingness to pay. Legislators froze Medicaid rates paid to nursing homes in 2009 and cut them in 2012. The latest stats, from 2013, peg Minnesota's gap between what care costs and what nursing homes are allowed to charge at $34.44 per resident per day — the seventh-largest daily losses in the country. Fourteen Minnesota care centers have closed due to financial distress in the past five years.

That's bound to be noticed by a legislative caucus in which all but two members represent districts situated outside the Interstate 494-694 loop. Greater Minnesota pols know they do well to make an exception for local nursing home funding as they decry government bloat.

Schomacker, whose district is home to 12 nursing homes, cited one more reason his caucus is smiling on such facilities. Care industry leaders have made an extraordinary effort in the last year to craft a proposed new-and-improved payment formula. It would mean that instead of begging the Legislature each year to increase their rates, care providers would see their state compensation automatically grow apace with their cost of care for their mix of patients. The new formula also includes incentives for high quality, efficiency and best practices.

That work is an example of public program "redesign," a notion that has produced more buzz than action at the statehouse in recent years. When an industry group does the redesign heavy lifting for them, lawmakers do well to reward them.

Industry leaders Gayle Kvenvold of LeadingAge and Patti Cullen of Care Providers of Minnesota put a $200 million price tag on their new formula's implementation. Schomacker and his committee whittled it down to $138 million. It can't go lower and do the job, he says.

Lourey advised last week that if Schomacker and company want the Senate to agree with a $138 million boost for nursing homes, they will have to come the Senate's way on a few other things. He was ready with for-instances: Child-protection improvements. The Minnesota Family Investment Program. Mental-health services. Homelessness prevention. Dental care for the poor. Measures to increase the number of primary care medical providers in Greater Minnesota.

"I will not end this session with nursing homes seeing the only increase, when there are so many other important needs to be met," he said.

Then there's the little matter of nearly $700 million in shifts, inflation disregards and purported savings in the House's human-services bill, the latter of which human-services Commissioner Lucinda Jesson called "far overstated and speculative."

"In defense of our budget, at least our money is green," Lourey said of the plan he assembled. "Theirs is pink, yellow and blue. It's Monopoly money." Lourey says he likes the new nursing home reimbursement formula, too. "I'd love to deliver on that formula. But I've got to get some real numbers out of the House first," he said.

I'd guess that in the next few weeks, the price of House GOP loyalty to local nursing homes could climb pretty high.