Nursing Homes Under-Funded by Medicaid in 2010

A recent study conducted by the American Health Care Association(data was compiled by research firm Eljay) reveals that in 2010, nursing homes were paid less than minimum wage by Medicaid, at an average rate of $7.17 per hour per patient. The national minimum wage is $7.25 per hour. Medicaid payments to nursing homes equal less than minimum wage

Medicaidis a primary source of funding for nursing homes nationwide, accounting for 64 percent of total funding. Mark Parkinson, President and CEO of the American Health Care Association, says the industry’s reliance on Medicaid is cause for concern in light of the aging Baby Boomer generation, as the increasing aged population will strain the nation’s already-stressed healthcare system.

Currently, skilled nursing facilities rely on Medicare to fill in payment gaps, but Medicare’s nursing home coverage is limited to a maximum of 100 days after a qualifying event, such as a hospital stay, and will continue to cover a nursing home stay only as long as the patient has documented progress from physical, occupational, or speech therapy. Once this limit has been reached, and/or the patient is no longer progressing in therapy, payment reverts to private pay or Medicaid for patients who have exhausted all their personal assets.

Parkinson notes that this reliance on Medicare is risky, considering that most states’ Medicare and Medicaid systems are facing budget cuts. States with the largest Medicaid underfunding include, according to the AHCA’s report, New York, Illinois, Massachusetts, Minnesota, New Jersey, and Wisconsin.

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