Virginia Nursing Home Establishes Charitable Foundation To Help Close Gap Between Expenses and Medicaid Payments

Partly to help "close the gap" between Medicaid reimbursements and expenditures, Lucy Corr Village, a nursing home run by Virginia's Chesterfield County Health Center Commission, has established a charitable foundation, which so far has raised approximately $3,500 in tax-free donations, the Richmond Times-Dispatch reports. Of the 224 Lucy Corr residents, nearly 50% receive Medicaid benefits. Lucy Corr has a daily $33 shortfall between the cost of care for residents and the amount of Medicaid reimbursements it receives from the state; over the course of a year, the shortfall totals $1.3 million. The funds raised also will "address general expenses" at Lucy Corr, including construction debt accumulated during a recent renovation and expansion. Wayne Edmunds, a member of the foundation's board, added that the foundation's creation "is not necessarily tied to [the nursing home's] financial predicament." He said, "The foundation would have been set up regardless of financial problems." A recent audit of the "cash-strapped" nursing home revealed that its financial situation could "force it to close" within in the next 18 months. Sam Moffet, the foundation's chair, said, "We are just getting started. These things are not cured overnight. ... We will be breaking even one day" (Richmond Times-Dispatch, 11/27).

The Loophole Connection
The establishment of the foundation follows the Chesterfield County Health Center Commission's decision not to participate in the state's planned use of the Medicaid loophole, which could provide $259 million to the state budget (Fischer, Richmond Times-Dispatch, 11/27). Under the loophole, states pay city- or county-owned care facilities more than the actual costs of health services, receive additional matching funds from CMS and then require the facilities to return the extra state funds. The states sometimes pay the facilities a small fee for participating and use the extra federal funds for both health and non-health programs (Kaiser Daily Health Policy Report, 10/10). The Times-Dispatch reports that had Lucy Corr participated in the loophole plan, the facility could have drawn at least $1.8 million. Thus far, only Bedford County and the city of Petersburg have agreed to participate in the loophole plan (Richmond Times-Dispatch, 11/27).