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House gives nod to nursing home bed tax extension

HB 2160 has support of nursing home industry

By Dave Ranney | March 06, 2013

The House today endorsed a bill for extending until July 2016 a state tax on nursing home beds.

First enacted in 2010, the levy generates about $7.5 million annually and is used to draw down an additional $9.2 million in federal aid for nursing homes, which the state then uses to increase the nursing homes’ Medicaid reimbursements.

The tax was to be phased out by July 1, 2015 with reductions beginning incrementally this July. House Bill 2160 would leave the tax in place through July 1, 2016.

“If we don’t pass this bill, we’ll be drawing down considerably less additional federal revenue in (fiscal) 2014 and there wouldn’t be any additional revenue in 2015,” said Rep. David Crum, an Augusta Republican and chair of the House Health and Human Services Committee.

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Rep. David Crum, R-Augusta

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Crum said the bill had been endorsed by the associations that represent the state’s for-profit and nonprofit nursing homes.

In 2010, the state’s nonprofit nursing homes opposed the tax, arguing that it was unfair to force nursing homes to raise their private-pay rates to generate additional Medicaid dollars that would not be spent on private-pay residents. But that opposition is gone. Debra Zehr of LeadingAge Kansas, the chief lobbyist for that segment of the industry, testified earlier to Crum's committee that their previous concerns about the tax had been misplaced.

“We heard from the nonprofits,” Crum said. “They support it.”

The House is expected to take final action on the bill Thursday.

Rep. Barbara Bollier, a Mission Hills Republican, spoke against the measure Wednesday during floor debate in the House.

“I am not against our wanting to generate additional matching funds from the federal government,” she said. “But I think this is something that we as a state should do as a whole. We shouldn’t be putting the burden on just the people who happen to live in a nursing home.”

Bollier said she has nursing homes in her district that pay the tax but do not have any residents on Medicaid.

“They pay the tax and get nothing back,” she said.

Earlier, Kansas Advocates for Better Care, a group that represents the interests of nursing home residents and their families, asked the Health and Human Services Committee to stipulate that nursing homes spend most of the money generated by the tax on quality-of-care initiatives.

The committee did not adopt that recommendation.

“The way the bill is now, nursing homes can spend the money any way they see fit,” said Kansas Advocates for Better Care Executive Director Mitzi McFatrich. “We think that goes against the intent of the original bill, the one that passed in 2010.”

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