WASHINGTON – The American Health Care Association is calling possible Medicaid cuts “unwise and unwarranted” and says they could have “an economic impact of up to $4.2 billion and threaten jobs.”

The AHCA, citing an analysis by the Lewin Group, said potential Medicare cuts expected in a forthcoming Centers for Medicare and Medicaid Services rule present a direct threat not just to the care of the frail, elderly and disabled, but also to America’s local, state and national economies, employment base and tax revenues.

The data underscores the significance of skilled nursing facilities (SNFs) to the nation’s economic activity.

The Lewin Group estimates that a potential reduction of up to $720 million would result in a total economic impact of $4.2 billion in the first year. In addition, the reduction in funding for long term care facilities will impact more than 40,700 jobs, more than $1.6 billion in wages and salaries and approximately $618 million in tax revenue in the first year alone.

“As it appears to be the intent of CMS to proceed with regulatory-driven cuts to Medicare-financed nursing home funding, we intend to make it crystal clear to federal, state and local officials that the proposed cuts not only threaten seniors’ access to quality care nationwide, but will also negatively impact the economy and employment base,” stated Bruce Yarwood, president and chief operating officer of the AHCA. “From our perspective, and as the data confirms, the CMS-driven ‘Forecast Error’ Medicare cuts represent a ‘lose-lose’ proposition for seniors’ care needs as well as the U.S. and local economies.”

The AHCA’s estimate of the “Forecast Error” represents a direct cut of $720 million in economic activity in the first year.