Home’s Price Hike May Put Medicaid Seniors Out of Bed

By Daniel Treiman

Published September 19, 2003, issue of September 19, 2003.
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The only Jewish nursing home in St. Louis is being slammed by critics who say its new $60 million facility is too expensive for lower- and middle-class Jews and warn that the project is busting the institution’s budget.

The daily private-pay rate for a skilled-nursing bed at the Jewish Center for Aged in St. Louis has jumped from $150 to $220 since the nearly century-old nonprofit institution moved into its new home earlier this month. The center has also cut by more than half the number of beds for low-income seniors that may be paid for through the Medicaid program.

Center board members say that the new facility, renamed The Cedars at the JCA, which like the previous one has 276 beds, was intended to compete for more private-paying residents, who would then subsidize a smaller number of Medicaid beneficiaries. Critics say that the changes represent a betrayal of the center’s responsibility to meet the needs of a wide spectrum of the Jewish community’s elderly.

“They’re forgetting about the whole middle-class Jewish population of St. Louis,” said Larry Satz, whose mother lived at the old facility for a little more than a year. “My mother was moved because… my dad can’t afford [the new rates] and there’s not too many people who can. And they’re cutting down Medicaid beds…. So you’re going to have a handful of Medicaid people [and] super-rich.”

Critics also say that the center has overextended itself financially, endangering the very viability of the city’s only Jewish nursing home — an institution that is particularly important for observant Jews who require kosher meals.

The president of the nursing home’s board of directors, Joe Rechter, said in a statement issued to the Forward that the center faces deficits of “several million dollars” in each of the next two years. He attributed the center’s woes to “forces outside its control,” citing government cuts to Medicaid and Medicare and a deteriorating economy, that resulted in the center’s finances deteriorating by about $3 million a year since building began in the spring of 2001.

Rechter stated that the center needed to replace its “obsolete” old facility, which he said could no longer compete with newer nursing homes for higher-income Jewish residents. He said that the old facility would only have been able to attract Medicaid patients and would thus have run a “significant” annual deficit and had a “limited” Jewish population because of laws prohibiting discrimination in acceptance of Medicaid funds.

Paul Wagman, a senior vice president at Fleishman-Hillard, a public relations firm hired by the center, said the new facility “is certainly more upscale than the existing one.” It was intended, he said, to attract private-pay residents, who would subsidize “the shortfalls anticipated from serving Medicaid residents,” for whom, he said, the government reimburses the center at only $95 per day.

In contrast to the old facility, where residents generally had roommates, The Cedars is made up almost entirely of single-occupancy rooms — a decision that has been faulted by many for contributing to the increased costs.

But Wagman said that other nursing homes in St. Louis still charge more than the new facility’s $220 daily rate. “At some of the competing facilities in St. Louis, the average daily price is $275 to $300 and above,” he said, adding that even the old $150 rate would be difficult for many middle-class people.

There is widespread agreement that the old facility was inadequate, and the Jewish federation of St. Louis had endorsed plans for a new building. Critics, however, say the plans for Medicaid beds and private-pay pricing at the new facility were misguided. Linda Holtzman, a staff member for Jews United for Justice, a local activist group that has emerged as the leading critic of the center’s actions, said that the $220-per-day rate at the new facility may be “in the ballpark” for a high-end private nursing home but is $50 or $60 more than the high end for nonprofit nursing homes in Missouri.

In light of the center’s financial problems, critics have objected to the compensation of its executive vice president, Dennis Barsky, who in 2001 earned $480,000. Wagman said Barsky’s compensation included a $250,000 “milestone bonus” related to building the new facility and that the center’s executives are paid “on par” with other facilities of similar size. In each of the three preceding years, Barsky earned between $350,000 and $375,000, according to center tax returns. Nationally, it is not uncommon for top executives at large nonprofit Jewish nursing homes to be paid more than $300,000, and a few earn in excess of $400,000.

Concerns about the new facility first came to the fore in January, when residents who were on Medicaid and their families began reporting that center staff members were warning them that there may not be beds for them in the new facility and that they should begin looking elsewhere for a place to live. Holtzman said that the center’s actions sparked “panic” among residents’ families.

An alderman in the suburb of Town and Country who helped arrange zoning for the new facility, Satz said he received three calls from center staff members who mistakenly believed that his mother was on Medicaid and encouraged him to move her.

Center officials have said that it was never their intention to pressure people to leave, blaming it on poor communication. The center guaranteed that all residents who were on Medicaid or near eligibility for the program would have Medicaid-certified beds in the new facility. To accommodate them, the center increased the number of Medicaid-certified beds from the 85 originally planned for the new facility to 114 — still far below the old facility’s 242. Medicaid-certified beds can also be occupied by private-paying residents.

Critics also say that in order to market itself to a higher-end clientele, the center is downplaying its Jewish identity. They note that the new facility’s name, “The Cedars at the JCA,” is not clearly Jewish and point to some marketing materials that make no mention of anything specifically Jewish and refer to the center’s rabbi as a “chaplain.”

Wagman, however, said that the name change was intended to make the new facility sound less “institutional and geriatric.” He said that in recent years the center has been home to both Jews and non-Jews “in roughly equal numbers” and that the marketing materials that sparked criticism were meant to encourage non-Jews “to consider the home with an open mind.” He said that materials aimed at Jews have a supplement with Jewish activities and that new advertisements mention the center’s daily synagogue services.

One vocal critic, local attorney David Rubin, suggested that the center’s crisis stems from the decision to build a more upscale facility, which he attributes to the relative affluence of its board members.

“I believe that the people that were serving in a leadership role at the JCA may have been well-intentioned and they certainly wanted to do the right thing, but they wanted to make sure that their own loved ones were taken care of in accordance with the standards that they live by,” he said. “And those standards are no longer consistent with the standards that many of the rest of us live by.”

The Jewish Federation of St. Louis, which in 2002 provided $325,000 from its annual campaign and endowments it administers to the center, has also sounded a note of pessimism about the new facility’s ability to serve community needs. Citing the center’s “substantial” costs of transitioning to a new facility and of serving nonfully paying residents, the federation’s president, Harvey Harris, wrote in a July 23 opinion article in the St. Louis Jewish Light that “the projected future operation of this new facility would no longer fulfill the community’s historic vision of long-term care for Jewish elderly who cannot afford private nursing home rates. This includes both Medicaid eligible as well as moderate-income seniors.”

The federation’s executive vice president, Barry Rosenberg, told the Forward that the federation would “work closely” with the center to “address the current situation.” To that end, the federation has asked local banker John Dubinsky to head up a panel to examine the issue and, Rosenberg said, recommend how the community should “deal with the economic crisis that the JCA finds itself in.” The center has also convened a community task force to examine its options.






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