Accounting transfer to send Medicaid funds to Susque-View

LOCK HAVEN — The Clinton County Commissioners plan to take part in a short-term budget scheme  that could send $750,000 to the county-owned Susque-View Home after a two-week period this spring.

Known as the intergovernmental transfer payment, or IGT, the financing method involving 21 counties and the state draws $800 million in federal Medicaid funds annually that would otherwise bypass Pennsylvania.

Pennsylvania was one of the first states in 1991 to discover the complicated financing scheme. The process starts with the 24-hour deposit of funds in a bank by a group of counties that own nursing homes, such as Clinton County.

Commissioner Jeff  Snyder  said the use of the funds is  limited to services provided by Susque-View. The issue was discussed at the board’s Monday work session.

The county’s transfer to the state funds represents the difference between how much nursing homes collect as Medicaid reimbursements and the potential maximum payments they could obtain if the same patients were covered by Medicare. The difference can amount to several hundred dollars a day per resident.

The state then counts that as its own money to earn matching federal Medicaid dollars. Normally, the federal government supplies 54 percent of the money spent on Medicaid in Pennsylvania, with the state covering 46 percent.

In the quick IGT turnaround of funds, the state is able to generate a federal match — amounting to $820 million in the October 2001 transaction — without putting in any of its own share. The counties get all of their original money back, and the proceeds of the federal match cover a transaction fee.

In Clinton County’s case, a short-term investment of $2.13 million from the  county’s cash reserves  becomes a bonus revenue with some of the money earmarked for special help to county-owned nursing homes.

Some  for-profit nursing homes contend the funds in Pennsylvania have benefited many non-Medicaid programs and disproportionately helped county-run nursing homes, which are competitors.

A phase-out of the program begins next year, and the IGT revenue generated for Pennsylvania could be $120 million less than this year, as the first of successive 15 percent reductions.