40 states plan to increase nursing home Medicaid rates

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More than 65% of Medicaid now is managed care, long-term care programs to expand, PricewaterhouseCoo
More than 65% of Medicaid now is managed care, long-term care programs to expand, PricewaterhouseCoo

Reversing a trend of rate cutting during the Great Recession, most states are increasing Medicaid reimbursements for nursing homes, according to a recently released report. However, states also are accelerating efforts to reduce the number of nursing home residents, the report shows.

In the current fiscal year, 39 states have increased nursing facility Medicaid rates, according to a survey of state programs by the Kaiser Family Foundation's Commission on Medicaid and the National Association of Medicaid Directors. Forty states plan to boost rates in fiscal year 2015.

State finances were hurt by the severe economic downturn that began in 2008, leading many to restrict Medicaid spending, the report notes. The switch to rate increases signals widespread economic improvements. Rates also are on the rise for other major provider types, including physicians and managed care organizations. The exception is hospital inpatient rates, which more than half of states are planning to restrict.

While rate increases are good news for providers, many already are in deep financial distress given current reimbursement levels. In some states, nursing homes that have closed have blamed inadequate Medicaid funding. Furthermore, states continue to seek ways to limit the number of people receiving care in institutional settings, the Kaiser report shows.

Thirty-three states took actions to increase funding for home- and community-based care in fiscal year 2013, according to the report. This number shot up to 42 states this fiscal year, and will rise to 47 in fiscal 2015. Strategies include expanding Programs for All-Inclusive Care of the Elderly (PACE) and more liberal use of waivers to direct Medicaid funds toward HCBS.

Click here to access the complete document, released Tuesday.