Virginia County Nursing Home Commission Opts Out of Medicaid Loophole

"Defy[ing]" the state and county governments, Virginia's Lucy Corr nursing home in Chesterfield County has "reject[ed]" participation in a plan to bring more than $259 million in federal funding to the state, the Richmond Times-Dispatch reports. In a 5-1 vote, the Chesterfield County Health Center Commission, which oversees publicly owned local nursing homes, decided to forgo incentives and "not exploit a loophole in the federal Medicaid law" (Fischer et al., Richmond Times-Dispatch, 10/10). Under the loophole, states pay city- or county-owned care facilities more than the actual cost of health services, receive additional matching funds from the Centers for Medicare and Medicaid Services and then require the facilities to return the extra state funds. The states sometimes pay the facilities a small fee for participating, and use the extra federal funds for both health and non-health programs. In January, federal officials issued final rules to close the loophole gradually; following a 60-day delay on implementation ordered by President Bush, the regulations took effect in mid-March (Kaiser Daily Health Policy Report, 7/29). John Gibney, one of the commissioners, said, "I felt that through this process, Medicaid funds would be used for a purpose which they were not intended. ... I thought it was improper to do that." The Post-Dispatch reports that the use of the loophole is legal, as Virginia Gov. James Gilmore's (R) administration "beat the deadline" for the closure of the loophole, and the state will still receive a total $259 million in Medicaid funds "regardless" of the commission's vote. Daniel Gardner, spokesperson for Health and Human Relations Secretary Louis Rossiter, said, "The cash total to the state will remain the same. The remaining [six] localities will each get more." According to Chesterfield County Administrator Lane Ramsey, the county is "still trying" to compromise with the commission, adding that "the nursing home needs the money" (Richmond Times-Dispatch, 10/10). For further information on state health policy in Virginia, visit State Health Facts Online.