Medicaid expected to underpay nursing homes this year by $14.17 per patient day

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Nursing homes will face Medicaid underfunding in 2009 by a projected $14.17 per Medicaid patient day. That totals $4.7 billion for the year, according to a new report from accounting firm Eljay LLC.

The Medicaid reimbursement outlook for 2010 and 2011 looks even more dismal, according to the annual report. It is expected to be worse than the last seven in which the report was compiled due to unprecedented state budget deficits and the expiration of federal stimulus funds at the end of 2010, the report said. The actual daily reimbursement shortfall for 2007 was estimated at $14 per Medicaid patient day. Medicaid pays for more than two-thirds of skilled nursing facility patient days annually. Medicare plays a role in cross-subsidizing Medicaid deficits, the report said.

States still rely heavily upon provider taxes to fund nursing home reimbursement, the report found. But most states with provider taxes chose not to increase nursing home reimbursement, nor lower the provider tax rates this year. Instead, they used money from the American Recovery and Reinvestment Act of 2009 (ARRA) to subsidize state budget deficits. States continue to redirect more of their long-term care budgets to non-institutional services, the report also said.


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