AHCA: Medicaid underfunds SNFs by $4.1 billion

Nursing Homes, April, 2004 by Douglas J. Edwards

Nursing homes are continuing to see red when it comes to state Medicaid funding for nursing home care: Collectively, states shortchange providers and residents at least $4.1 billion annually, according to the third annual BDO Seidman report prepared for the American Health Care Association (AHCA). The loss will grow as rate increases fail to keep pace with nursing home cost inflation, the report notes.

Based on 2001 data (the latest available) from 37 states representing 88% of Medicaid patient days in the country, the average shortfall is $11.55 per Medicaid patient day--18% higher than last year's reported average shortfall of just less than $10 per Medicaid patient day and a 28% increase since 1999. When BDO Seidman compared the shortfall in states providing data for all three years, the average shortfall climbed 16% from 2000 to 2001 and almost 31% since 1999. In fact, the shortfall would expand significantly if more than just Medicaid allowable costs were considered, the report states.

New Hampshire has the highest reimbursement disparity, with an average per patient daily shortfall of $28.18. Rounding out the top ten are New Jersey, Utah, Missouri, Massachusetts, New York, Oregon, Washington State, South Dakota, and Wisconsin.

AHCA also highlighted the findings of a report by the Kaiser Commission on Medicaid and the Uninsured, citing enormous concern among state healthcare officials about a possible dramatic rise this summer in the state cost of Medicaid. On July 1, the $20 billion in federal fiscal relief adopted last year is set to expire.

The BDO Seidman study is available at www.ahca.org/brief/seidmanstudy0312.pdf.> BY DOUGLAS J. EDWARDS, ASSISTANT EDITOR

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