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Medicaid underfunding nursing homes: Problem expected to grow
Medicaid programs underfunded nursing facility care by $5.6 billion in 2010, paying $7.17 per hour per patient, less than the nation's current minimum wage of $7.25 an hour, according to an analysis from the American Health Care Association in Washington, DC.
The December 2010 report, A Report on Shortfalls in Medicaid Funding For Nursing Home Care, identifies the states most affected by the rising pressure on state Medicaid budgets, both in terms of the highest aggregate Medicaid underfunding and highest per-patient per-day underfunding. The top six states are New York, Illinois, Massachusetts, Minnesota, New Jersey, and Wisconsin.
Joseph Lubarsky, president of Louisville, KY-based Eljay, which conducts the study each year, says he wasn't surprised by these findings, especially in light of the impact of the recession on state budgets. Severe budget shortfalls, he says, are making it difficult for states to provide adequate payments.
The enhanced federal matching funds and nursing home provider taxes, says Mr. Lubarsky, "saved the day for 2010 and 2011. Without them, it would have been much, much worse than it was. At least through 2010, there were still rate increases in most states that hovered around inflation, because of those two items."
While the economy is improving, says Mr. Lubarsky, revenues are not going up fast enough to cover deficits. "As we go forward, things are going to be real ugly," he says. "Most of the states for FY 2011 gave little or nothing. A lot of them are coming back now and saying we've got to do some major cuts," he says. "I think they are pulling their hair out to a greater degree now than at the time of the study."
Mr. Lubarsky says that the news is likely to get worse before it gets better. He notes that a chart included in the report shows that the percentage of costs covered by the rates tends to drop considerably during recessionary times.
"Then when things improve and states have more money, they pay a greater share of costs," he says. "During the last inflationary time in 2002 and 2003, we had a significant drop. I think it will dip even further before it rebounds."
Mr. Lubarsky says that Medicaid directors are thinking about how they pay for care and services, and many are looking into reforms such as bundled payments. "Many are going toward wanting to pay a price for service, but with that price there is a certain expectation of quality," he says. "Whether they can afford that is another question right now."
Contact Mr. Lubarsky at firstname.lastname@example.org.