Cattaraugus County nursing homes receive dismal fiscal reports

LITTLE VALLEY – County lawmakers recently heard the final 2013 numbers for the two county-operated nursing facilities in Cattaraugus County, and the trend of lower equity and fiscal condition seems to be continuing.

While equity in the facilities in Machias and Olean are dropping, the collectible debt is also becoming harder and harder to bring into the coffers, according to Michael McCarthy, of the Queensbury-based, McCarthy & Conlon, LLP accounting firm.

“Because the balance of what is owed is in older receivables, it is becoming questionable on recovery of the funds and collections are tightened,” McCarthy said.

But, that is only one of the uncertainties that face the nursing home situation in Cattaraugus County, as well as others across the state. As changes in Medicaid reimbursement changes to a new methodology, changes in revenues are to be expected, he said. With the effective end of the old ideology, payment streams like the Intergovernmental Transfer fund will not be in place for much longer.

“Your payment from the IGT for 2013 will be the last true IGT payment you receive,” McCarthy said. “Those that have been in your facilities before the effective ending date of Oct. 1, 2013 will still be under the old methodology, but, as those people cease to use the services, the new patients will be under the new system and, you will be negotiating rates for each of them.”

The IGT was a federal pool of funds that was created through Medicaid reimbursements that would be disbursed to municipally operated nursing homes. The funds have been a traditional source of revenue for the homes’ budgeting purposes. Changes that will eliminate the payments will make that funding stream nonexistent, according to McCarthy.

The situation makes funding for nursing homes a bit more of a challenge, according to the audit numbers. For 2013, The Pines at Machias facility finished the year with about a flat level of operating revenue over the previous year, with $9,691,950. Expenses had fallen from the 2012 level through a collaborative effort between legislators and nursing home staff, but the total operating expenses still came out to $143,522,551, a loss of $3,830,601 for the year.

The Pines of Olean, with similar challenges as the Machias facility, saw an increase of operating revenue of about $800,000, to $9,351,688. Couple that with expenses rising by about $20,000, to $11,993,038, and the operation fell short of self-funding by $2,641,350.

In all, the two facilities, which are operating at about 99 percent capacity, according to Timothy Hellwig, county nursing home director, are losing a combined $6,471,951.

The Cattaraugus County Legislature has been meeting to find ways to save more money in the nursing homes as future considerations are explored.