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Pandemic-related costs and the plight of long-term care providers

Pandemic-related costs continue to pile up for providers and they need immediate help from the American Rescue Plan. An average 100-bed nursing home accrues over $30,000 per week in uncompensated costs for staff personal protective equipment and ongoing testing of staff and residents.

Funding for Nursing Homes - $396M

Funding for Personal Care Homes and Assisted Living Residences - $50M

• Pennsylvania’s nursing homes need an immediate $396 million to cover the extraordinary costs to mitigate the spread of COVID-19 and care for residents. This funding should be distributed consistently according to the formula in Act 24 of 2020 to support those facilities hardest hit by COVID-19.

o This would allocate $79.2 million to nursing facilities on a per licensed bed methodology, and the remaining $317 million based on Medicaid occupancy in Q3 2019.

• Slowing the spread and preventing infection from COVID-19 has been extremely financially taxing on an already underfunded Medical Assistance-funded long-term care system.

o More than 2 in 3 residents in nursing homes have their stays paid by Medical Assistance.

o Prior to COVID-19, Medical Assistance underfunded nonprofit nursing facilities by an average of over $80 per resident per day. The pandemic has worsened this situation.

• Without swift action, more quality providers will shutter their doors, or sell to out of state providers with long-standing records of cutting staffing and care quality, at a time when Pennsylvanians are aging with more complex medical needs.

o Inadequate Medical Assistance reimbursement is accelerating closures2, sales3, and capacity reductions4, threatening access to quality providers for families across the commonwealth.

o Recent reporting by The New York Times5 and NPR6 document that sales of nursing homes to private equity firms result in decreased staffing hours and increases in expenditures not directly related to patient care like building or equipment leases.

Funding for Personal Care Homes and Assisted Living Residences - $50M

• Personal care homes and assisted living residences have been similarly impacted by the pandemic and should receive an infusion of $50 million to support their ongoing extraordinary costs to maintain resident health, safety, and well-being.

In 2020, the General Assembly recognized the plight of long-term care providers during the COVID-19 pandemic with a historic investment to help cover the extraordinary costs of the virus. Funding was allocated through the Department of Human Services as outlined in Act 24 of 2020. These funds were spent long before the Nov. 30 deadline. The costs they helped defray have continued to mount and will continue to do so for at least the remainder of 2021.


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