One Year Later, Sequester Cuts Still Hurt Local Nonprofits
Posted
Jordan Fouts-
The impact of automatic sequester cuts, compounded by lost funding and extra costs, are becoming painfully clear one year later for several area nonprofits. Across-the-board spending cuts of $1.2 trillion that took effect March 1, 2013, trickled down to agencies like Cardinal Services and Home Care and Hospice. The sequester was conceived in 2011, with the indiscriminate nature of the cuts meant to pressure legislators into reaching a budget agreement. Cardinal lost $70,000 for early childhood education programs and a 4-percent cut meant dropping two routes from the agency’s transportation program, Kosciusko Area Bus Service. The county Council on Aging sustained a 15 percent cut, a loss of $8,000. And a 2-percent loss from sequestration was a surprise for Kosciusko Home Care and Hospice Inc. Many non-profits turned to the county to help make up for the shortfall, requesting a total of $70,000 above what they received in 2013. Instead, the 2014 budget approved by county council included a 3-percent cut in disbursements to nonprofits compared to recent years. “It’s going to be a rough year for us,” Darla McCammon, executive director of the Animal Welfare League, said after her agency was approved for $60,975 – about one-sixth of its yearly operating budget, almost $2,000 less than it received for the past few years and far below the $81,857 it requested. She said they’ll have to rely more on volunteers and donations from the community. Cardinal received $90,534 from the county this year, compared to the $108,000 it requested. While CEO Jane Wear said by email Friday it’s only a small part of their overall budget, she also noted that, however cautious, earlier optimism after the transportation service saw the restoration of some sequestration cuts proved unfounded. KABS General Manager Kevin Planck had expressed hope tempered by wariness in August that two eliminated county routes might be restored. Wear said reinstatement of some money will only allow KABS to break even with its operating expenses. Head Start had to eliminate transportation for children and make changes in service design, she said. And while they’ve been told to expect reinstatement of those dollars, “we don't know how much we will get or how we will be expected to use them.” A 2-percent increase in Medicaid waiver rates Jan. 1 provided some relief, she added, but not much – it’s the first increase since they received a 7 percent rate reduction in 2010. “The cut by the county hurt but Cardinal's total operating budget is in excess of $19,000,000 so our biggest funding issue is losses incurred in Medicaid-funded programs,” Wear said. “We have a significant operating loss right now and are working hard to raise donations from companies and individuals in the community to help make up our deficit.” Medicaid was exempt from the sequester, but Medicare spending was set to be reduced by 2 percent per year from planned levels over the 2013-2022 period of the automatic cuts. A combination of funding cuts, declining reimbursements from Medicare, Medicaid and private insurance, and increased competition all lead to the decision in February for Home Care and Hospice to lay off two nurses and a social worker. Rumors followed that the agency might close, prompting Executive Director Rick Paczkowski to respond. “Moving forward I think it will get worse, not better, but the last thing we want to do is cut services,” he said Wednesday, noting that they had to look at where they were and determine the most efficient staffing. “We don’t want to have to say we can’t take a patient here or there because we don’t have the funding to help them out.” He added that any of the agencies in the K21 Health Services Pavilion would say they’re in the same boat. Much of the hospice’s funding comes through per diem reimbursement for each patient. Other money comes from the county – $41,461 this year, a little below their request as well as their average disbursement in recent years – the K21 Health Foundation, United Way of Kosciusko County and private donations. In addition to reimbursements dropping 2 to 3 percent each year for the past three years, he said they’ve seen a decline in patients as more hospice providers moved into the county since 2011. The only hospice provider in Kosciusko for 35 years, now they must compete for a piece of a large aging demographic. There are more people in the county ages 45 and up than the 20-to-45-year-old segment, he said, which is “another reason the competition is moving in. Based on demographics you would see an increase, but will you? I don’t have a crystal ball.” Rising insurance co-pays from 10 to 30 percent also mean that more people are declining home care, he noted. Paczkowski doesn’t foresee any further staff reduction in the coming year, but said it’s hard to plan too far ahead in the health care industry. “A year and a half is long-term because health insurance changes so quickly,” he said. “We used to be able to plan five years out. You still can, but to me it’s useless.”
