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Nursing homes: Budget cut would lead to layoffs, closures

PROVIDENCE, R.I. (AP) — State nursing homes said on Monday that a substantial cut to their funding in lawmakers' latest budget proposal would likely lead to facility closures and layoffs.

The $9.6 billion budget, unveiled late Friday and still in the works, includes an 8.5 percent cut in Medicaid payments to nursing facilities over nine months, beginning on July 1.

"Closures. The impact will be closures," said Virginia Burke, president of the Rhode Island Health Care Association. "Facilities would not be able to keep operating."

Burke said the 8.5 percent cut would mean a loss of close to $30 million for the facilities. She said the facilities, which rely on Medicaid payments because two-thirds of their patients use the insurance program, are already financially strapped because of the state's bungled benefits computer system, known as the Unified Health Infrastructure Project.

A spokesman for Democratic House Speaker Nicholas Mattiello said the bill, passed in committee last week, isn't the "final product."

"The nursing homes issue is still developing," spokesman Larry Berman said.

The proposed cut comes after dozens of nursing homes successfully sued Rhode Island for what they said were unauthorized cuts in past years. That judgment, which could cost the state up to $24 million, made headlines last week when it was revealed a state attorney didn't tell his bosses about the decision and had been removed from the state's attorney rolls.

The attorney resigned, and state officials have asked for a criminal investigation into his conduct. Berman said lawmakers are trying to reach a settlement in that case.

Burke, the Rhode Island Health Care Association president, said nursing homes have not seen any money from the judgment as the state continues its appeal process. This cut, she said, would take effect in three weeks.

James Nyberg, the director of LeadingAge RI, another association that represents nursing homes, agreed with Burke.

"So it is premature at best to cut nursing homes now based on a reimbursement issue that has not been legally resolved," Nyberg said in a statement.

He said one nursing facility already told him it likely would have to lay off seven nurse's assistants if the cut is passed.

Republicans, who make up a small minority of Rhode Island's General Assembly, lambasted the budget plan generally and the nursing homes cut specifically.

"The nursing homes filed their lawsuit in good faith. They won in court," said Brandon Bell, the state's GOP chairman. "But in Rhode Island, even if you win your case at the courthouse, you may end up losing it up at the State House."