A steep cut in Medicare payments to nursing centers caring for short-term patients on their way back home will likely result in layoffs, tighter budgets and vanished profits, nursing home officials warned.

Medicare announced it will cut payments for its patients in short-term nursing home stays by 11.1 percent Oct. 1, or nearly $60 a day per patient. The change means nearly $37 million less in federal payments to Colorado nursing homes next year, said Arlene Miles of the industry group Colorado Health Care Association.

Coupled with a 1.5 percent cut in the state Medicaid rate, which pays for the majority of nursing home residents, the losses will threaten staffing levels and squeeze facilities already challenged by low patient counts.

"They're taking a double hit," said Shelley Hitt, the state ombudsman for nursing home residents. "We're very concerned about what they might mean for quality of care and operational impacts."

"It's definitely going to have a negative impact on our homes," said John Brammeier, chief financial officer of Piñon Management in Lakewood, which oversees 12 nursing facilities. Brammeier said the company will tighten its belt and try to avoid staff cuts at its centers, but that staffing is the highest cost and is vulnerable.

"We're going to continue to try to convince them they've gone too far," Brammeier said of federal Medicare officials. "Honestly, I really didn't think they were going to do this."

Some companies are already cutting back at management levels, Miles said.

For-profit nursing home companies traded on Wall Street have seen their stocks drop by half since the payment change was announced July 29.

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