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State Budget Cuts May Mean Hundreds of Nursing Homes Close

The proposed budget cuts put forward by the Texas Legislature could have a devastating effect on the nursing home industry and the patients who live in nursing homes. This blunt fact was detailed in a recent article in the Dallas Morning News. Here are excerpts:

Hundreds of nursing homes, including dozens in Dallas-Fort Worth, may close if lawmakers cut Medicaid as leaders propose.

GOP leaders have introduced budgets in both chambers that would reduce by one-third the state’s budget for its 56,000 nursing home residents on Medicaid. Two-year spending would sink to $2.8 billion, from $4.2 billion.

“We are not crying wolf. Pieces of the sky are falling,” said Tim Graves, head of the Texas Health Care Association, a trade group that represents 500 nursing homes, most of them for-profit operations. He said the cuts would jeopardize about half of the state’s 1,100 nursing homes: those with 70 percent or more of patients on the Medicaid rolls.

In 2009, the elderly and disabled made up only 30 percent of the enrollment in Texas Medicaid, a state-federal health program for the poor. But they consumed nearly 60 percent of the $24.5 billion spent that year.

Some advocates say Texas spends too much on institutional care of enfeebled Medicaid recipients, and should do more to keep them at home. Graves responded that Texas’ Medicaid payment levels for skilled nursing homes rank 49th in the nation.

He said 551 Texas nursing homes, 85 of them in Dallas and surrounding counties, are at serious risk. That’s because Medicaid covers 70 percent or more of their residents, he said.

Graves said the cuts could trigger a wave of bankruptcies and closures, especially combined with coming cuts in Medicare to help pay for the federal health care overhaul.

Mike Gavin, president of Plano-based Preferred Care Partners Management Group, which owns nine North Texas nursing homes and 26 others across the state, agreed the outlook is scary for the industry.

Currently, Texas Medicaid pays the company about $130 per patient per day, he said. Under the leaders’ budget, that would drop to $88.

Gavin said Preferred Care would have to lay off nurses and assistants, especially at its two Dallas County homes, DeSoto Nursing and Rehabilitation and Lancaster Nursing and Rehabilitation. At each, 80 percent of patients are on Medicaid.

Layoffs jeopardize the quality of care, which Gavin said can set off “a death spiral” of citations from the state, damage to a home’s reputation and relatives’ removing their loved ones.

Bob Kraft

I am a Dallas, Texas lawyer who has had the privilege of helping thousands of clients since 1971 in the areas of Personal Injury law and Social Security Disability.

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