A new government survey of 13,285 US nursing homes has found that the average provider received 82 cents on the dollar from Medicaid for the costs accrued while caring for beneficiaries.
“Assessing Medicaid Payment Rates and Costs of Caring for the Medicaid Population Residing in Nursing Homes” comes after five years of research and unpacks the financial relationship between Medicaid payment rates and estimated Medicaid costs.
The report also tells the story — and shared struggle — of thousands of providers.
It was assembled by contractors for the Assistant Secretary for Planning and Evaluation (ASPE), which advises the US Department of Health and Human Services.
“One of the questions that we always ask is whether we’re adequately paying nursing homes for the cost of the services they are providing, right?” noted report co-author John Bowblis, PhD, a Professor and Research Fellow of the Scripps Gerontology Center at Miami University, in an interview with McKnight’s Long-Term Care News. “If a nursing home wants to make investments in quality improvement, whether that be [improving] staffing levels or paying workers more to lower turnover, that means they need to have adequate financial resources. And that’s not going to be feasible given the current payment models.”
For 40% of nursing homes, Medicaid per diem payments covered 80% or less of their estimated daily Medicaid costs, researchers found. For 52% of facilities, Medicaid per diem payments covered 80%-100% of costs. The remainder (8%) received Medicaid payments that exceeded their costs.
The study also draws connections between funding and staffing, six months after the CMS staffing mandate passed. The new rule requires nursing homes to deliver 3.48 hours of daily direct care per patient.
“We looked at the staffing levels that the facilities were at at the time [of the study],” Bowblis explained. “It’s estimated that [approximately] 80% or more of nursing homes would have to increase staffing levels to meet the staffing mandates. Without revenue offsets from Medicare, Medicaid, or other sources, those payment rates are going to be more of a deficit relative to costs.”
Communities with total nursing staff levels below 3.00 hours per resident day had a Medicaid payment-to-cost ratio of 0.85. On the other end, nursing homes with nursing staff levels above 4.0 hours per resident/day had a Medicaid payment-to-cost ratio of just 0.77.
“Nursing homes have gotten a bad reputation, largely because of bad press,” Bowblis said. “But some of it is just because Medicaid programs are not adequately paying for services or resources that are needed to to improve the quality of nursing.”
