The president/CEO of the California Association of Health Facilities (CAHF) says a bipartisan congressional effort to ensure that Medicaid providers are paid in a timely manner is a necessary move, given California’s history of failing to pass a state budget on time.

Reps. Brian Bilbray and Anna Eshoo introduced the Fair Pay to Medicaid Providers Act, which would require Medicaid to reimburse all providers, including nursing facilities, hospitals, and community health centers in a timely manner.  Current law only requires prompt Medicaid payment to physicians.

“During the past 16 years, the California state budget has been signed on time only five times, causing significant delays in Medicaid payments,” said CAHF CEO Jim Gomez. “This has caused tremendous hardship for nursing facilities, forcing some providers to take out loans on retirement accounts and second mortgages on their homes in order to raise enough cash to pay employees.”

Nearly 70 percent of operational costs for skilled-nursing facilities are labor-related. Medicaid payment delays bring providers to the brink of financial collapse and put patients in jeopardy.

In 2008, California’s budget impasse placed providers at significant risk as they operated without Medicaid payments for approximately 60 days. About two-thirds of residents in California nursing facilities depend on Medicaid.

When the American Recovery and Reinvestment Act was enacted, hospitals and nursing homes were assured of prompt payment, but only for as long as the enhanced Federal Medical Assistance Percentage was provided to states. As of July 1, 2011, nursing facilities no longer have the protection of the prompt-payment provision, posing a serious threat to the health and well-being of residents in nursing facilities.

“Reps. Bilbray and Eshoo recognize that providers need predictable payments in order to provide consistent, high-quality care to our most vulnerable citizens,” Gomez added.