Virginia County Officials Attempt to ‘Pressure’ Nursing Home into Medicaid Loophole Deal

Chesterfield County, Va., officials appear to be using an external audit to "pu[t] pressure" on the Chesterfield Health Center Commission, which runs the county's nursing home, to participate in Gov. James Gilmore's (R) plan to collect $259 million through the Medicaid loophole, the Richmond Times-Dispatch reports. County Administrator Lane Ramsey on Oct. 29 said that the audit -- to be presented at a county Board of Supervisors meeting on Nov. 14 -- shows that the viability of Lucy Corr Village, which cares for about 250 patients, is "doubtful in the next 12 to 18 months." Ramsey has been "trying to persuade" the county Health Center Commission to sign off on the Gilmore administration's loophole plan that would bring about $2 million to the county, $1.8 million of which would go to the nursing home (Fischer/Martz, Richmond Times-Dispatch, 10/30). In a 5-1 vote on Oct. 8, the county Health Center Commission decided to forgo incentives and "not exploit a loophole in the federal Medicaid law." 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, 10/10).

'State Politics'?
Ramsey said yesterday that he is "sure the commission will do the right thing in the final analysis and that their primary concern will be with the residents," adding that "[n]ot taking this money is like conducting the nursing home's funeral." He noted that should the commission vote again on Nov. 1 to reject the loophole proposal, the "county will certainly try to work to keep the nursing home open," adding that the residents "should be assured that the county is concerned about their well-being." James Shepard, chair of the commission, declined to comment on Ramsey's statements, saying he had not yet seen the report. However, he noted that Lucy Corr Village last month made a profit of $30,000 on a cash basis, not including depreciation, and said any financial problems the home has experienced were due to construction delays. "The nursing home is Chesterfield County's nursing home, and I am sure they will all do the right thing when it comes to the welfare of the home," he said, adding that the "whole thing" was not about the home, but about "state politics." Commission member John Gibney said he is "not prepared to participate" in the state's plan, "[r]egardless of any financial troubles," calling the deal "very wrong." The Chesterfield County Board of Supervisors, which originally voted in favor of the deal, has now joined the commission in opposition to the plan. The county's two state senators have also spoken out against the deal (Richmond Times-Dispatch, 10/30). Officials in Richmond, Norfolk, and Prince William and Orange counties also have opposed the plan, while the Board of Supervisors in Petersburg, is scheduled to vote on the plan on Nov. 13. The Bedford County Board of Supervisors has accepted the plan (Kaiser Daily Health Policy Report, 10/29). For further information on state health policy in Virginia, visit State Health Facts Online.