Agencies breathe easier after Medicaid funding extended

With state monies drying up in a bad economy, Uncle Sam recently threw Jewish social services agencies a financial lifeline.

President Barack Obama on Aug. 10 signed a bill that extends the Federal Medical Assistance Percentage, which provides funds to state Medicaid programs.

Part of the 2008 Federal Recovery economic stimulus package, the measure will pump some $87 billion nationwide into organizations that rely on payments from Medicaid (called MediCal in California). Medicaid is a state-run program, funded in part by the federal government, which pays for medical costs to treat low-income people.

Avi Rose

“We’re relieved,” said Avi Rose, executive director of Jewish Family and Children’s Services of the East Bay. “MediCal is pretty substantial, about 30 percent of our budget, and a huge part of our early childhood mental health program.”

The FMAP extension is important for Jewish federations and partner agencies, as Medicaid funnels nearly $6 billion per year in government aid to Jewish hospitals, nursing homes, Jewish Family and Children’s Services and similar agencies.

“Without these funds, states would have certainly cut back on their Medicaid programs, which would have had an adverse impact on how Jewish communal providers deliver needed care to their respective communities,” said William Daroff, vice president for public policy and director of the Jewish Federations of North America’s Washington office.

One of those providers is the Jewish Home, a nursing care facility in San Francisco that derives approximately 85 percent of its revenue from MediCal.

Daniel Ruth

Jewish Home executive director Daniel Ruth is glad that the federal government released the FMAP funds, but he said his institution’s financial future remains murky when it comes to MediCal payments.

“The foundation is still both shaky and unclear,” Ruth said. “What organizations like the Jewish Home have in front of them is a lack of clarity as to how programs and services will be organized, delivered and funded in the years ahead. We do know it’s going to change.”

Ruth explained that the state cut MediCal payments to nursing homes by 10 percent in 2008, later amending that to 5 percent the next year. Eventually the cut was rescinded, though payment rates were frozen for a time. The Jewish Home joined a lawsuit filed by the California Hospital Association demanding back payment for monies lost under the cuts.

The case will likely remain tied up in the courts for years. Meanwhile, Ruth said, the state owes the Jewish Home around $5 million.

That shortfall triggered in-house budget cuts, as well as an effort to increase revenues by other means. For example, the Jewish Home’s creative arts program used to run five days a week, eight hours a day. Ruth found he could cut those hours without any significant impact on residents.

Gayle Zahler

He said the Home has also begun doing more short-term rehabilitation care, which can bring in much-needed dollars.

“It’s in our strike zone to do it and do it well,” he noted. “We saw this demand in the community, so we’ve allocated more of our beds to people who need short-term rehab. It means those beds come out of service for long-term care admissions, which means we’re serving fewer long-term care folks.”

Ruth added, “We cannot afford to deliver services in the way we’ve been doing it based on current reimbursement frameworks.”

Gayle Zahler, associate director of the S.F.-based Jewish Family and Children’s Services, is also grateful for the federal dollars shoring up MediCal. But she doesn’t think the funds will make or break JFCS’ ability to serve needy Bay Area Jews.

“This funding was less than what the state received last year,” she says of the FMAP dollars earmarked for California, “and less than what it was budgeted for this fiscal year. In terms of this being something that turns the situation around, it isn’t.”

She says MediCal covers only 20 percent of JFCS services to the poor, elderly and indigent. But that 20 percent matters, especially on programs like adult day health care, which rely heavily on MediCal reimbursements.

What all this means for Jewish social service agencies is greater reliance on donations.

“Things are stable,” Zahler said regarding the bottom line at JFCS. “We’re very grateful to have the support of our donors. They recognize JFCS is the organization that provides a safety net, and they have stepped up. We have not at this point had to make major cuts.”

In the East Bay, Rose too said his agency has not had to make painful cuts in services — at least not yet.

“We hit our fundraising numbers on the nose this last year,” he said. “The community continues to be very supportive of the work we do, especially in the economic crisis. We’re looking to grow this year, and have been pretty successful competing for new grants and contracts.”

Still, he added, “It’s not the easiest time.”

contributed to this report.