A new report released by the American Health Care Association (AHCA), A Report on Shortfalls in Medicaid Funding for Nursing Home Care, reveals a bleak outlook for both Minnesota and the nation. The report reveals that Medicaid underfunded Minnesota nursing facilities by $166.4 million or $28.30 per Medicaid patient per day, further challenging an already financially-strapped profession.

Nationally, nursing facility care was underfunded by $6.3 billion in 2011, or $19.55 per patient per day. In addition, the report finds that at least 60 percent of states have either reduced Medicaid rates or were not provided any Medicaid rate increases for FY 2012.

In a statement released Thursday, December 15, 2011, Patti Cullen, president/CEO of Care Providers of Minnesota, commented, “The widening gap between the cost of providing the quality nursing home care that Minnesota’s seniors deserve and what Medicaid actually pays those delivering that care puts our most vulnerable seniors at risk. This report underscores the need for policymakers to consider the impact additional cuts to both Medicare and Medicaid funding for nursing facility care will have on America’s seniors and people with disabilities.”

A Report on Shortfalls in Medicaid Funding for Nursing Home Care is compiled by Eljay, LLC, a nationally renowned research firm, and funded by The American Health Care Association (AHCA), which engages Eljay, LLC to work with its state affiliates and other sources to compile information on the shortfall between Medicaid reimbursement and allowable Medicaid costs.

Key findings in the Medicaid Shortfalls report include:

• The shortfall in Medicaid reimbursement for nursing home care is projected to be $6.3 billion for 2011, or $19.55 per Medicaid patient day.
• For Minnesota, the 2011 Medicaid shortfall is projected to be $166.4 million, or $28.30 per Medicaid patient, per day.
• Medicare cross-subsidization of Medicaid continues to serve an important function in sustaining nursing home care. In 2009, the combined reimbursements from both Medicare and Medicaid resulted in razor-thin operating margins for skilled nursing centers.
• With Medicare rate reductions scheduled for 2012 and Medicaid margins projected at a negative 14 percent, a facility’s combined margin from these two government programs will fail to break even — dropping to negative 2.7 percent.
• Medicaid reimburses about 90 cents for every dollar of allowable cost incurred in providing long-term care for a Medicaid patient in 2011.

Care Providers of Minnesota will create a Minnesota-specific report in the next few weeks for members to use in their advocacy efforts. However, you can read the full analysis from Eljay on the Association website.

Patti Cullen, CAE
952.851.2487
pcullen@careproviders.org

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