Daily fees add up

Surcharge adds thousands of dollars to annual nursing home bills

By Lenora Chu

With Tuesday's start of the new fiscal year, many of the Legislature's budget bills, crafted to close a $4.2 billion deficit, are beginning to take effect.

But some of the budget adjustments regarding nursing homes took effect June 1, and many residents who pay their own way are already feeling the pinch of a new $5.56-a-day surcharge.


Maxine Allert of Rochester, whose 102-year-old mother lives in a nursing home in northern Minnesota, said the surcharge means her mother's savings quickly will disappear. Allert said the surcharge means an added cost of $2,029 a year to a nursing home bill that already tops $37,000.

Allert, who has power of attorney for her mother, is planning to sell her mother's house to help with the costs.

"It's an old home in a really small town, so we'd be lucky to get $50,000 or $60,000, which will probably last for a few more years," Allert said. "I'm hoping this will last until her dying day, because she doesn't want to be on public assistance."

The new surcharge, instituted to bring federal match dollars to the state's general fund, hits private-pay patients the most because the surcharge for residents on Medicaid or other medical-assistance programs are, essentially, covered by state money.

"Most of the people in her nursing home are on public assistance," Allert said. "So I don't see this as a way to bring in a lot of money (for the state). It's very unfair."

Rebecca Halverson, administrator of the Sacred Heart Care Center in Austin, is not a fan of the new surcharge. "We basically collect (money) for the state," she said. "There's no benefit to us at all."

The Legislature also eliminated the automatic rate increase paid by medical assistance programs to nursing homes, but legislators have indicated that the status quo is better than the alternative: a decrease in rates to save money for state insurance programs.

Rep. Fran Bradley, chairman of the House Health and Human Services Finance Committee, said the federal money leveraged by the new surcharge allowed the Legislature to avoid a 4 percent rate reduction proposed by Gov. Tim Pawlenty.


Halverson took a different approach. "We had a zero percent increase in rates, which we were supposed to be thankful for," she said. "But a zero percent increase is actually a decrease in the amount we have available to spend on resident care."

Although the base nursing-home rate was not reduced, the health and human services bill makes rate changes in other categories that amount to a decrease in revenues for facilities.

Bradley said the state faced a financial crisis, and tough decisions had to be made.

"There's no question about it, expenses are going up," Bradley said. "But that's true everywhere, and (nursing homes) are going to have to find creative ways to live within their means."

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