Medicaid underpayments soar to an average $22.34 per resident day, report finds

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The bleak Medicaid picture is unlikely to get better in 2013 for nursing home operators, a new report finds.

Medicaid underpayments are expected to exceed $7 billion nationally in 2012, an average shortfall of $22.34 per resident day. That's up from $18.54 in 2010, notes the “Report on Shortfalls in Medicaid Funding for Nursing Center Care.” The report was commissioned by the American Health Care Association and conducted by Eljay, LLC. It was released Tuesday.

Broken down into the costs for a typical 100-bed facility, where 63% of residents are on Medicaid, the shortfall translates into $500,000 each year, Eljay President Joe Lubarsky explained.

The cumulative effect of cuts has been “devastating,” AHCA President and CEO Mark Parkinson said.

“Every year, MedPAC does an analysis, but it only tells part of the story,” he said. “The Medicaid margin is negative. The true story when you add up the Medicare and Medicaid margins is that it's very, very thin.”

The report notes a few factors that will make Medicaid funding even more challenging moving forward: dual-eligible integration likely will have implications for both Medicaid long-stay occupants and Medicare-financed post-acute care average length of stay. The federal government is also pushing for expansion of home- and community-based services, which also are expected to drive down average occupancy rates. Many states also are pushing for managed care plans for Medicaid beneficiaries.

“Most states build incentives into managed care plan contracts emphasizing HCBS over center-based services,” report authors note.  You can download the report by clicking here, or from the above link.


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