Medicaid Reimbursements Fall Short of Nursing Home Expenditures, AHCA Study Finds

Nursing homes that care for Medicaid beneficiaries are spending $3.3 billion more than what they receive in reimbursements from the states, a study conducted by the American Health Care Association finds. The report examined average Medicaid rates in 36 states, finding that the rates, which are tied to "allowable costs," are not adequately funding the facilities (AHCA release 8/30). Comparing Medicaid rates with the costs that qualify for reimbursement, the study found that there is an average payment "gap" of $9 per patient per day. When this figure is extrapolated across the country, the annual shortfall reaches $3.3 billion (AP/Las Vegas Sun, 8/30). New Jersey has the highest "daily shortfall," with a $21.11 per patient daily payment disparity between the cost of providing care and what is reimbursed by the state. For an entire year, New Jersey's gap tops $236 million (Gannett News Service/Cherry Hill Courier Post, 8/30). Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured, said there is "no doubt" that nursing homes are not "fully reimbursed," but she added that the report makes "more of a political argument, not one that could go to court." The AP/Sun reports that the study is intended to provide AHCA with "ammunition" to lobby "Congress and states for more money for nursing homes" (AP/Las Vegas Sun, 8/30). AHCA President and CEO Charles Roadman said, "It's essential that Congress evaluate and act upon the underfunding of our seniors' nursing care when it reconvenes next week. The federal government has an obligation to step in and ensure that the well-being of our frail and elderly in nursing homes is a top budgetary priority" (AHCA release, 8/30). The study is available online.