Study: Medicaid underfunds nursing homes by $4.2 billion, providers call for pay hike

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Automatic 2% Medicare cuts begin
Automatic 2% Medicare cuts begin
Medicaid is underfunding state long-term care efforts by $4.2 billion this year, according to a new analysis of Medicaid financing released Wednesday by the American Health Care Association.

The funding shortfall, combined with the crippled economy and almost guaranteed state budget cuts next fiscal year, could threaten access to care, said AHCA president Bruce Yarwood. AHCA, along with several other healthcare advocates, have called on Congress to include an increase to states' Federal Medical Assistance Percentage in any stimulus package they may create.

Hardest hit by the under funding are New York and Illinois, who came up short by $548.1 million and $379.3 million respectively. Ohio, Pennsylvania and New Jersey filled out the top five.

Yarwood also noted that Medicare's continued cross-subsidization of Medicaid could have serious negative repercussions on the long-term care industry. According to the Medicare Payment Advisory Committee, the combined average margin on payments to nursing homes by the two programs was negative 1.8%.

The research was conducted on behalf of AHCA by Eljay LLC and was discussed in preliminary form at the AHCA annual meeting earlier this month. To view the full report, visit