Report: Inadequate funding of nursing homes expands by 45%

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States are underfunding the actual cost of nursing home care by at least $4.4 billion in 2007. This represents a 45% increase from 1999, according to an analysis of the nation's Medicaid program.

In 2007 the average per diem gap in Medicaid reimbursement is $13.15, according to the accounting firm BDO Seidman/ Eljay LLC. This is up from a shortfall of $9.05 in 1999, researchers noted. The states with the greatest disparity between the actual cost of providing quality care and Medicaid reimbursements are Illinois ($30.21), New Jersey ($28.64), and Wisconsin ($27.29).

"The chronic underfunding of Medicaid undermines the financial integrity of Medicare to the detriment of our profession's ongoing quality improvement efforts and our capacity to meet the increasing complex care needs of a rapidly aging population," stated Bruce Yarwood, president and CEO of the American Health Care Association, which commissions the report each year.