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Fund Earmarked For Nursing Homes Frozen In Budget Crisis

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Nursing home operators, often joined by advocates of better care for seniors and the disabled, have maintained that government-set payment rates for nursing homes are inadequate to ensure quality care. Most of the focus of those complaints falls on Medicaid reimbursement rates and, to a lesser extent, Medicare payments for long-term care.

The State of Missouri came up with an interesting idea to address the problem. As part of its state Medicaid plan, it announced late in 2000 that it would begin paying an “enhanced” Medicaid reimbursement rate to seven nursing homes in the state, all of them owned and operated by local governments. Those government agencies, in turn, would forward the “enhanced” payments back to the state, which would then make the money available to all nursing homes, public or private, for one-time “quality and efficiency” grants.

This complicated scheme would improve the profitability of, and the quality of care provided by, nursing homes, while costing the state very little. Because the federal government pays about 60% of Missouri’s Medicaid costs, it would amount to a transfer of funds from the federal government to state coffers, with ultimate distribution back to nursing home operators.

By budget time in 2002, Missouri had accumulated $133 million in “enhanced payments.” Last year’s budget provided for most of that money to be returned to individual nursing homes.

Then disaster struck. Missouri, like most of the states, was suddenly faced with a huge budget shortfall. Revenues fell $1.3 billion short of projections, and the state scrambled to cut spending.

Among the thousands of programs Governor Bob Holden cut was the remaining $20 million in nursing home quality and efficiency grants. Nursing homes cried foul, arguing that the money was never really the state’s to cut, since it had come from federal revenues into a fund earmarked for nursing homes, but a Cole County Circuit Court judge disagreed.

On appeal, the Missouri Supreme Court affirmed the lower court—and agreed with the Governor. The Missouri State Constitution requires that the state’s budget remain in balance, noted the Court. In order to accomplish that, the Governor has broad powers to withhold money, even after the it has been budgeted by the Legislature. The fact that the “enhanced payments” fund did not fall short of its own revenue projections does not prevent the Governor from choosing that fund to bear some of the brunt of budget cuts. Missouri Health Care Association v. Holden, December 2, 2002.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

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Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.