Painful cuts: Jewish Home faces loss of millions from Medi-Cal

It’s been around since 1871, withstanding the Great Depression, several recessions and two major earthquakes. It’s been the last refuge of comfort for generations of Jewish seniors. Yet could the Jewish Home of San Francisco now face its demise all because of the stroke of a governor’s pen?

With the lifting of a temporary injunction last December, a new statewide law may soon go into effect, triggering massive Medi-Cal cuts to 100 nursing homes in California, including what some say will be a multi-million-dollar hit to the Jewish Home.

Signed into law by Gov. Jerry Brown in March 2011, AB 97 mandated, among other things, a 10 percent reduction in Medi-Cal reimbursements to skilled nursing facilities with at least a section of hospital beds, such as the 142-year-old Jewish Home.

Such facilities — technically labeled DP-SNF for “distinct-part skilled nursing facility” — are paid higher Medi-Cal reimbursement rates than regular nursing homes or assisted-living facilities. Nearly all of the Jewish Home’s long-term residents depend on Medi-Cal to cover nursing care costs.

A temporary injunction, issued in January 2012 by Judge Christina Snyder of the 9th U.S. Circuit Court of Appeals, prevented implementation of the cuts. But in December, a three-judge panel of the same court lifted the stay.

Daniel Ruth, the executive director of the Jewish Home, is now bracing for impact, as are 700 staffers and the 375 people receiving care at the facility, most of whom are long-term residents.

“It is taking a meat cleaver rather than a scalpel approach to help deal with [state] budget issues,” he said of the law. “When the [9th Circuit] panel overturned the injunction, they invalidated approximately 17 years worth of precedence.”

Previously, according to Ruth, the burden of proof had been on the state to show that cuts to providers like the Jewish Home would not have a deleterious effect on those they serve.

While Ruth feels a 10 percent cut would be bad enough, he calls that figure misleading.

“What I find problematic and in fact disingenuous is when officials refer to this as a 10 percent reduction,” he said in an interview last week. “That is not a truthful statement because AB 97 results in nursing facilities having their reimbursements rolled back to 2008-2009 rates, less 10 percent. [That] represents a 25 to 30 percent reduction in our reimbursement.”

That, Ruth noted, will add up to approximately $12 million in Medi-Cal cuts to the Jewish Home, the largest private nonprofit nursing facility in California.

But wait. There’s more.

Because the law would be retroactive, the home would be on the hook for refunding Medi-Cal reimbursements the home took in from June 11 up to the day the law goes into effect. By the end of last year, that figure hit $16.5 million, and by June of this year, it would total $19.2 million, Ruth said.

The Jewish Home of San Francisco comprises five buildings set on five acres.

No one should look for relief from Sacramento any time soon.

“The governor has been unequivocal in his comments that this must be an era of fiscal restraint,” said Sen. Mark Leno (D-San Francisco), who chairs the Senate Budget Committee. “We will know within a few months if the multibillion-dollar projected revenue will hold up for the coming year. If that’s the case there could be some opportunities to restore judiciously some of the most painful and inequitable cuts. At the same time, I don’t want to give anyone false hope that it can be done immediately.”

The new law does not significantly impact Jewish assisted-living facilities such as the Reutlinger Community for Jewish Living in Danville, Rhoda Goldman Plaza in San Francisco or the Moldaw Family Residences in Palo Alto. They do not fall into the DP-SNF category, nor do they depend on Medi-Cal reimbursements.

But for those facilities that do, such as the Jewish Home, the cuts and retroactive liabilities could prove dire.

San Francisco suffers the most acute shortage of long-term care beds of any county in the state. According to Nancy Reagan, the director of legislative affairs for the California Association of Health Facilities, seniors make up 14 percent of the city’s population, with that number expected to rise to nearly 25 percent by 2030. Those seniors may face nursing home shortages.

“The only new long-term care beds built or added in San Francisco in the last half-century have been in hospital-based distinct-part skilled nursing facilities,” Reagan said,  “and the vast majority of these beds have been added by a single institution, the Jewish Home. The AB 97 rate reductions will have a disproportionate impact on the availability of long-term care resources in San Francisco.”

She added that if the cuts force San Francisco DP-SNFs, like Laguna Honda Hospital and Rehabilitation Center and the Jewish Home, to limit admissions, eventually most Medi-Cal skilled nursing-home placements for San Francisco residents will be in “the vast reaches of the Central Valley.”

Ruth won’t let that happen anytime soon, saying he has no plans to reduce the number of beds (380 to 400) at his facility. The home did temporarily cease long-term admissions two years ago when it closed down one of its aging buildings, but it has since resumed admissions of long-term residents.

Programs and staffing will take a hit at the Jewish Home

But internal budget cuts are coming, including changes in the Jewish Home’s programming and staffing. The facility currently employs more than 700 people, with Ruth targeting a workforce reduction of 16 to 20 percent over several months. The home’s website this week listed zero current job openings.

“We’re talking about cutting 20 percent of our expense structure,” Ruth said. “There will be changes in staffing. And while the changes are significant, as health care professionals and lay community members at the board level, we would not put forward a plan that would jeopardize the health and well-being of the people we serve.”

Still, cuts hurt. One successful program the home has maintained for more than a decade is its improv comedy clinic, created by Kung Pao Kosher Comedy founder Lisa Geduldig. Twice a month, residents would gather to practice their comedic skills and laugh it up. Now the program has been reduced to once a month, which saddens Geduldig.

“The first day I stepped into the Jewish Home I was overwhelmed by how full of life the place was,” she said. “I always assumed a nursing home was a center of torture and neglect. I never imagined it could be a home people wanted to go to. People are treated with respect there.”

Spending cuts are one step. In addition to reducing staff and programs, the home is fighting the Medi-Cal cuts directly, having launched a letter-writing campaign to legislators, pressing them to back away from cuts mandated by AB 97. It’s too early to tell whether it will have an impact.

The courts represent another battlefront. The California Hospital Association, on behalf of California DP-SNF institutions, filed a request for an en banc proceeding, which is a request to have an appeal heard by a larger panel, up to 11 judges from the 9th Circuit Court.

Should that request be denied or should the court rule against the nursing homes, then AB 97 will likely go into effect, though exactly when is impossible to predict.

“If we don’t prevail, the California Hospital Association is authorized to file with the Supreme Court of the United States,” Ruth said. “So it’s possible that AB 97 may be put into effect as early as 60 to 90 days or as late as two years from now.”

Skilled nursing homes are only one industry affected. The Medi-Cal cuts, which total some $1.5 billion, would impact low-income children and people with disabilities as well as seniors. Emergency room and hospital co-pays for Medi-Cal recipients would also skyrocket.

Rabbi Sheldon Marder with Jewish Home resident

One of the Jewish Home’s allies in Sacramento is the Jewish Public Affairs Committee of California, which lobbies lawmakers on issues of concern to the Jewish community. JPAC Sacramento representative Cliff Berg called the effort to minimize cuts to nursing homes, adult home day care and similar programs a “knock-down drag-out fight.”

“There was no lack of attention to the issue,” Berg said. “The Jewish community has a significant number of people who depend on various Medi-Cal programs that serve the elderly. JPAC is working with the Jewish Home to figure out how to blunt [the law’s] impact on the home. It’s not hopeless, but it’s not going to be an easy road.”

That’s because California’s newly balanced budget — an achievement trumpeted by Gov. Brown — can be realized only by including Medi-Cal cuts. Neither Ruth nor Berg expects the governor or the Legislature to sacrifice a balanced budget, even if it hurts the state’s most vulnerable populations.

Reagan fears the worst should the cuts go through.

“If nothing is done to reverse things, it is likely that there will be several hospital and [skilled nursing home] closures,” she said. “There will also be an exodus from the Medi-Cal program among physicians, pharmacists and dentists. The expansion of Medi-Cal enrollment will essentially be moot since beneficiaries will have virtually no access to specialists. It’s hard to put a pretty face on it.”

Ruth hopes that with a full-court press of citizen outrage and focused lobbying, he can make headway with a relatively liberal state Legislature, both chambers of which had boasted Democratic super-majorities until recently.

Leno said he and other lawmakers are looking into possibly rescinding either the 10 percent cut or the rollback to 2008 rates. That would hack some $42 million from the state’s general fund, but so far the senator has found some bipartisan support for eventually doing something. After all, most districts are home to affected nursing facilities.

Meanwhile, the Jewish Home will reach out to donors.

“Every year, the Jewish Home receives $5 million to $6 million a year in philanthropic support,” Ruth noted. “We need the community at this time more than any other time to, at the very least, continue that level of support, and should they feel inclined to support [us] at greater levels, that will only benefit a prized jewel in their community.”

Ruth and the Jewish Home board also have plans to make major improvements to the facility. The home has broadened its short-stay rehabilitation program and expanded admissions to its acute geriatric psychiatry program. However, plans for a dramatic reconfiguration of the campus, including extensive construction, have been suspended — but not abandoned.

“We have been planning for a future Jewish Home that would more effectively address the needs of the Jewish community,” Ruth said, “and doing it in a far more cost-effective way, reducing our reliance on entitlement programs.”

But first they have to get from here to there.

Said Ruth: “Our concern and our challenge — which we will meet, because we’re not going away — is to move us through a bridge period so that for another 142 years we will continue to serve the community.”

Added comedian Geduldig about the lawmakers that passed the Medi-Cal cuts: “Who are these people? They think they’re not going to get old, or they don’t have parents or grandparents?  Make cuts somewhere else, and not on our bubbes and zaydes.”

Dan Pine

Dan Pine is a contributing editor at J. He was a longtime staff writer at J. and retired as news editor in 2020.