Industry report finds nursing homes losing money as states cut Medicaid

Also, California officials prepare to appeal federal court decision striking down cuts to some providers, and Wisconsin announces that its shortfall is less than expected.

Kansas Health Institute News: Report: Medicaid Short In Offsetting Nursing Home Costs
The nation's nursing homes lose money caring for people whose stays are covered by Medicaid, according to a report by the American Health Care Association, a trade group headed by former Kansas Gov. Mark Parkinson. ... At the same time, at least 30 states either cut or froze their Medicaid rates last year (Ranney, 1/3). 

Kaiser Health News: Case-By-Case, California Examines Adult Day Care
Adult day health care centers in California came close to elimination after lawmakers in the Golden State voted to cut all Medicaid funding for the centers in order to save about $85 million. Advocacy groups quickly sued to stop the cuts in federal court, arguing that the centers, which offer services such as health care, physical therapy, mental health treatment, shared meals and exercise, help keep some 35,000 frail seniors and disabled people out of costly nursing homes (Varney, 1/3).

California Watch: Judge Stops Medi-Cal Budget Cuts; State Plans Appeals
Attorneys for California's Medi-Cal program are gearing up to appeal two court rulings issued last week that strike down a 10 percent cut to some medical service providers for low-income Californians. Christina A. Snyder, a U.S. District Court judge in Los Angeles, ruled in favor of pharmacies and hospital-based nursing facilities that sought to fend off the rate cut. ... The cuts are among many drastic measures being used to close California's massive budget deficit (Jewett, 1/4).

California Healthline: Federal Court Halts Some Medi-Cal Cuts
State officials said they will appeal the decisions. The two lawsuits were brought by Managed Pharmacy Care and the California Hospital Association. ... And a lawsuit by the California Medical Transportation Association, suing on behalf of non-emergency medical transportation service providers, is set for Jan. 9. (Gorn, 1/4).

Health Policy Solutions (a Colorado health news service): Health, Education Budgets Challenge Lawmakers
The Great Recession has caused dramatic spikes in Colorado's Medicaid rolls, prompting Gov. John Hickenlooper to ask lawmakers to approve an additional $346 million this year to cover Medicaid funding. ... Clearly budget battles are going to define the session. Brace for clashes: Republican vs. Democrat, House vs. Senate, and health expenses vs. everything else (Kerwin McCrimmon, 1/3). 

Milwaukee Journal Sentinel: State Scales Back Medicaid Shortfall By $300 Million
In a bit of good news for the state's strained budget, Gov. Scott Walker's administration is scaling back by more than $300 million the two-year shortfall projected for state health programs for the poor. But a state health department spokeswoman said that to ensure the state health programs remain affordable, the Walker administration will still seek to proceed with a half-billion dollars in proposed cuts affecting tens of thousands of recipients. In a letter to lawmakers Tuesday, the head of the Department of Health Services said that the shortfall through June 2013 is now expected to be $232 million in state and federal money, down from the $554 million that was projected in September (Stein, 1/3).

Associated Press/(St. Paul) Pioneer Press: Wisconsin's Projected Medicaid Shortfall Improves 
Despite the good news, Department of Health Services Secretary Dennis Smith said in a letter to lawmakers dated Dec. 30 and made public Tuesday that the new estimate does not change plans to cut costs in various Medicaid programs that could result in about 65,000 poor adults and children losing coverage. The cost-savings plan is awaiting approval by President Barack Obama's administration, and the news that the Medicaid shortfall isn't as bad as previously thought only increases pressure on Walker's administration to scale back the proposed reductions (Bauer, 1/3).