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Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

Rising veteran's home rates under review

Veterans issues

The Legislative Audit Bureau (LAB) completed the first phase of its evaluation of Wisconsin veteran’s homes.

The state currently maintains two facilities for veterans in need of nursing home or assisted living care: the Wisconsin Veteran’s Home at King, and the Wisconsin Veteran’s Home at Union Grove.  King provides nursing home care for up to 721 eligible veterans.  Union Grove provides nursing home care for up to 120 veterans and assisted living care for up to 123 eligible veterans and spouses.

Expenditures for the two facilities increased from $54.6 million during 2004-05 to $89.7 million during 2008-09, a 64 percent increase in four years. During the same period, revenues increased by 49.4 percent, resulting in operational deficits that are paid using a one-time $20 million federal payment to King during 2005.

Both facilities receive Medical Assistance payments for the majority of nursing home patients. During January, 2010, King received an average of $199.86 per nursing home resident per day, while Union Grove received an average of $252.

This discrepancy occurs in private pay rates as well.  Since offering nursing home care for the first time during 2007, rates have been significantly higher at Union Grove than at King, with the exception of a period during 2007 and 2008 that the Department of Veterans Affairs (DVA) required Union Grove to set its rates at the same level as King. 

Since then, private pay rates for King residents rose 17.5 percent, while private pay rates at Union Grove rose 45.8 percent.

Since 2007, DVA has attempted to keep Union Grove’s rates from rising so much faster than King’s, first by simply requiring that Union Grove’s rates be the same as King’s, and then by deliberately setting rates lower to “limit the size of the rate increase.”

According to the LAB, these rate limitations are part of the reason Union Grove has an operations deficit in recent years.  They are also part of the reason Union Grove’s rates have risen since 2009, to make up for the gap between revenues and expenses.

The LAB identifies vagueness in the rules regarding rate-setting as a culprit.  DVA staff members used varying methods of calculating rates.  However, the vague rules do not explain higher costs at Union Grove taking in more money per patient every year and recording deficits unlike King. It could simply be that King, a much larger facility with far more residents, has an economy of scale advantage.

An effect that must be considered is the higher rates rise, the fewer residents will be able to afford the rates.  LAB estimates that at least 12 residents left Union Grove during 2010 due to rate increases.

The LAB is recommending the Board of Veterans Affairs develop a formula to determine private pay rates for nursing home and assisted living care at the Wisconsin Veterans Homes, that the Board of Veterans Affairs formally review and approve all rate-setting proposals developed by DVA staff, and DVA report back to the Legislative Audit Committee during January 2011.  

This was the first phase of the LAB’s examination of veteran’s home operations.  I look forward to the next audit release and commend the best state government auditors in the country for another outstanding analysis on behalf of Wisconsin taxpayers.

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