Where did the millions of dollars from Berks Heim go?

READING, Pa. - Some Berks County residents are asking where the millions of dollars the Berks Heim made over the past few years have gone, according to Commissioner Christian Y. Leinbach, who said he saw the question on Facebook.

At Thursday's commissioners meeting, he responded: "The Heim dollars have always stayed with the Heim."

"We didn't take money away from the nursing home," said Robert J. Patrizio, Berks County's chief financial officer.

Patrizio explained that in the early 2000s, the nursing home was losing millions of dollars every year. The general fund was putting the money out, and the Heim was not making enough money to repay it.

Those losses are why the county decided to build a smaller and more efficient building for the nursing home. He said the new building and other decisions moved the facility to the break-even position, but at that point, there were accumulative losses that the general fund and county taxpayers were paying for the Heim's operating costs.

Patrizio said that when the Heim started making a profit four or five years ago, the loan from the general fund started to be paid down.

"The money stayed there and began to grow and stayed in the Heim," he said. "The problem is that, when we project from 2018 forward, we're projecting losses now, and those losses are going to eat away that cumulative fund balance, and in 2023 – I believe – we're going to be negative again. Once that becomes negative, the general fund is not getting repaid the cost of the operations, and the county taxpayers are going to have to pay for that."

Leinbach said he continues to attribute the predicted deficit on flat Medicaid bed rates from the state. He said in the past 11 years, Medicaid rates have increased 6.67 percent; whereas, the cost of healthcare has increased 30.8 percent, and last year, legislators advised counties that they should expect flat rates for the next five years. Approximately 80 percent of the beds at the Heim are paid for by Medicaid.

Leinbach said that there are currently 18 county homes left in Pennsylvania, and four counties are looking at selling their homes. Seven years ago, there were 32 county homes in the state.

"The Medicaid reimbursement rate is critical," Leinbach said. "It's an important issue, and if it's not resolved, my prediction is the vast majority of the 18 counties that have homes right now will be sold probably within the next five years."

Patrizio has issued a new report, which includes the $1 million the county is receiving from the state through the inter-governmental transfer (IGT), but it still projects a deficit for the Heim. According to the report, which will be made available to the public, with the current Medicaid rate of $220 per bed, the Heim will break even this year. In order to continue breaking even, however, the Medicaid rate needs to increase to $226 in 2019, $233 in 2020, and $273 by 2026. Leinbach said that private pay is currently at $355 per bed.

"I'm not asking [state officials] to bail out counties that make bad decisions. That's wrong. The taxpayers should never be asked to do that," Leinbach said. "The Medicaid reimbursement rate was set up to fund Medicaid beds for nursing homes, so let's make the number right. You can't put a number in place that's pretty much flat for 16 years and call that doing your job."

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