The administration says the approach will help reduce Medicaid costs to taxpayers while giving the elderly greater freedom to stay in their homes in a state that is already one of the biggest spenders on nursing-home care.
But representatives of nursing home industry groups told the Senate Aging and Youth Committee they fear their institutions are getting shortchanged in the process.
Sen. Pat Vance, the committee's chairwoman, said after the hearing she thought both sides raised valid points. Vance, R-Cumberland, said cost-of-living increases in Medicaid reimbursements are needed for both nursing homes and home and community-based services.
"There's some truth on both sides," Vance said.
A nursing home coalition called Pennsylvanians for Quality Care has been lobbying heavily against a plan Rendell has proposed for the coming year's budget to give nursing homes the same amount of Medicaid dollars they are receiving this year. At the same time, the spending plan calls for expanding services, such as adult day care, and subsidies that allow landlords to make apartment buildings handicapped-accessible for former nursing-home residents.
But more resources and services should be preserved for the sickest and frailest people, and the elderly who are in home and community-based services tend to be in better health, said Dr. Stuart Shapiro, president and CEO of the Pennsylvania Health Care Association.
Nursing home groups have argued that over the last three fiscal years, the state's Medicaid program paid nearly $290 million less than it owed for nursing home care. And while state spending has increased 22 percent during Rendell's administration, nursing home costs have risen 26 percent, they say.
The number of Pennsylvanians using home and community-based services has grown from more than 17,000 in the 2002-03 fiscal year to roughly 33,000 in the current fiscal year, while the number of nursing-home residents has remained relatively flat at about 81,000.
But it is far less expensive to care for someone at home or in a community program. A year of nursing home care costs the state nearly $52,000 per person, compared to about $21,000 for a year of home and community-based services.
As Pennsylvania's elderly population grows, so will the demand for nursing-home care, warned Ron Barth, president and CEO of PANPHA, a lobbying group that represents a range of nonprofit senior services, including nursing homes.
"The actual number of people needing nursing home services is going to increase, not decrease," Barth said.
Michael Hall, deputy secretary of long-term living for the Department of Public Welfare, said the administration recognizes a need for nursing homes, but contended that home and community-based services should be expanded to complement them.
"I'm not someone who is anti-nursing home," Hall told the committee. "But ... I think there needs to be a balanced role. I don't think it should be a role where they consume 90 percent of the oxygen in the room."
In written testimony provided to the committee, Hall and other administration officials noted that Pennsylvania's daily Medicaid reimbursement rate to nursing homes, which averages $180 per resident, is the fourth-highest in the nation.
Pennsylvania's more than $3 billion in annual spending on nursing homes is second-highest in the nation and surpasses four states with much larger populations: Illinois, Texas, Florida and California, the department said.
Dolores Nordin, 65, of Plymouth Meeting, is among the state's beneficiaries of home-based care. Nordin, who has multiple sclerosis and uses a wheelchair, told the committee she feels more comfortable staying at home.
"At night, when I'm crying in pain ... my husband is there to hold me," Nordin said. "If I were in a nursing home, there's no one to do that. They'd say, 'Shut the door - eventually she'll stop crying."'
