The nation’s largest nursing home chain believes that state capitals are finally catching on to what industry watchers have known for years — Medicaid rates are not cutting it.

Lawmakers can no longer ignore the wave of nursing facility closures hitting several states and are beginning to address inadequate pay rates, said George Hager, CEO of Genesis Healthcare, which operates 400 skilled nursing facilities in 29 states.

“I believe that, in many state capitals, there is increased awareness of the significant, chronic underfunding of this industry,” he told investors Friday. “And with an improving economy, improving state budgets and tremendous pressure as you see increased facility closures in states like Massachusetts, you’re seeing increasing pressure at state capitals to try to move towards more responsible funding for this industry.”

Chief Financial Officer Tom DiVittorio estimated that future Medicaid rate increases could actually reach north of 2%, bettering previous estimates of 1%. As one example, he pointed to New Mexico, where a provider tax program appears “almost assured” of being implemented, pending federal approval.

“Look, we’ve got some states that are going in the other direction as well, or are flat, but overall, I think you should be thinking about two percent or north of two percent on Medicaid rates looking ahead,” he added.

Kennett Square, PA-based Genesis reported an increase in Medicaid revenue per patient day in the first quarter of 2019 up to $230, compared to $224 the same period last year. Overall, Genesis reported a $15.3 million net loss in the first quarter on revenue of $1.16 billion, compared to a $68.5 million net loss and $1.3 billion the same period of 2018.