Arkansas Medicaid Reimbursement Rise Increases Rates for Private-Pay Nursing Home Residents

In response to new state Medicaid rates, state Medicaid officials, the Arkansas Health Care Association, and state Legislature are working "relieve the pressure" on some nursing homes that have had to increase their rates for private-pay patients -- some by as much as $500 per patient per month -- the Arkansas Democrat-Gazette reports. The AHCA, a lobbying group that represents 212 of the state's 240 homes, has even released a sample letter last week advising home owners "how best to break the news to private-pay patients" (Wickline, Arkansas Democrat-Gazette, 6/6). At the center of the issue is a state law that prohibits nursing homes from charging Medicaid beneficiaries more than private-pay residents. This year, according to the AHCA, three new provisions have driven up Medicaid reimbursements: a state reimbursement change from a flat-fee to a cost-based formula; a federal cost-of-living increase for state Medicaid rates; and the leverage of a $5.25 per day occupied bed tax, the funds from which will be used to draw down increased federal Medicaid reimbursements for the facilities (Rowett, Arkansas Democrat-Gazette, 5/30). But Ray Hanley, the state's Medicaid director, said, "What I have been told by operators is that [the private-pay rate increase] really has little ... to do with the Medicaid rate itself going up, but it is an overdue action because of [increased] malpractice premiums." Hanley noted, however, that state officials are working on ideas to prevent nursing homes from increasing rates "more than they need to." Rep. Jimmy "Red" Milligan (D) said, "Short of sanctioning a policy that says it is OK to charge Medicaid more than you charge anyone else, which we really don't want to do, we are looking at some alternatives that might entail a system of averaging ... those private-pay rates" (Wickline, Arkansas Democrat-Gazette, 6/6).