Press Release
1/25/2007
From: Joe Douglas, (907)868-1289, (907)441-5791 cell, joed53@yahoo.com

It has recently come to my attention that there is something odd going on at the Alaska Department of Health and Social Services, Division of Senior and Disability Services. I co-own and operate two assisted living homes in Anchorage. We are certified to receive payment from Medicaid. We were receiving $70.54/day for Medicaid clients, and we thought all homes were paid the same. Someone told us that higher rates were being paid to other homes. Upon investigation, we learned that we could apply for a ‘cost based rate.’ We completed a very complex application and submitted it in June or July, expecting a new rate of $145/day. We were then told that there was no money in the budget for a rate increase, and that there was a ‘freeze’ that would not be lifted until July 2007. The president of the Alaska Assisted Living Association, Sherry Mettler, told us that the freeze did not apply to us, since it only covered homes that already had a cost based rate. DSDS responded that the freeze applied to everyone. Finally, we consulted an attorney who confirmed that the freeze should not keep us from getting the increase. At that point, DSDS relented and authorized the increase from $70.54 to $115-$120/day—it is pretty confusing and I am still not sure of the new rate.

I asked for a list of homes receiving the cost based rate. There are 154 homes on the list. 23 homes- 16%- receive $150 or higher, 131 homes- 84%- receive less than $150/day. I noticed that officers of the AK Assisted Living Association were paid the highest rates. A former president in North Pole gets $242/day.

There are an additional 74 homes getting Medicaid funds at the $70.54 rate, totaling 228 homes certified for Medicaid. Only 6% of these homes receive $166/day or higher—14 homes. Of the 14, 9 are current or former ALAA officers or close associates. Why are these homes paid at a much higher rate?
AS 47.24.017 (D) sets the minimum rate for adult care at $70, but it also states that a higher rate could be paid to cover cost of care.

At the same time DSDS is underfunding assisted living homes, their budget for the Personal Care Assistant program has increased from $7 million in 2000 to $83 million/year in 2006. The legislation which started the increase came about in 1999, when the legislature’s Long Term Care Task Force sponsored bills in the House and Senate. SB 56 and 57 became law. Nowhere in the discussion were assisted living homes mentioned, the argument was that PCA funding would save money on seniors going into nursing homes.

The PCA program was authorized to pay $21/hour, with 55 hours/week authorized, or $1155/week, $4620/month. PCA agencies were required to pay 50% of the funds to the care providers. The number of hours authorized has been reduced to 30, but since 2001, the state has paid $300 million to PCA agencies, at least $60 million of which was pure profit.

Nursing homes charge $400/day-- $12,000/month. The PCA program gave the impression that it was saving $7,380/month. But assisted living homes being paid $150/day only cost $4,500/month for 24-hour care.

No one in the assisted living association has brought this up as an issue.

Now the PCA agencies are pushing an initiative called ‘Keep the Elders at Home,’ apparently an effort to keep seniors from going to assisted living homes.

http://finance.groups.yahoo.com/group/aaln/