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Nursing Home Closures Blamed on Medicaid Reimbursement Rates

By Harry S. Margolis

A recent front-page article in The Boston Globe highlights a longstanding dispute between MassHealth and the nursing home industry over reimbursement rates for care of MassHealth covered nursing home residents. The Massachusetts Senior Care Association (MSCA) blames these rates, which have not increased since 2005, on the closure of 50 facilities over the past decade, including four during the past five months. According to the MSCA, nursing homes on average lose $37 per day of care for each MassHealth-covered resident.kreiter_nursinghomes2_biz

The Commonwealth responds by saying that the consolidation is appropriate because fewer people need nursing homes care today due to alternatives such as assisted living and home care. State Representative Thomas A. Golden, Jr., of Lowell, cites the value of having facilities close to where the residents used to live so that family and friends can visit. State Senator Harriette L. Chandler is quoted in the article as recognizing the need for increased funding. She has proposed funding to increase reimbursement rates and create training and career programs for nursing home employees.

In an earlier blog post, I reported on a talk by Scott Plumb of the MSCA who described both the funding shortfall for nursing homes and the transformation of the industry over the last dozen years from one that provided long-term care for impaired seniors to one that provides more intensive, short-term care for people at the end of life. Here are some of the statistics he cited:w-scott-plumb

  • 9 out of 10 nursing home residents come from hospitals.
  • 60% return home.
  • 54% stay in the facility for less than a month and 86% for less than six months.
  • Only 10% of nursing home residents stay for more than a year and 2% for more than five years.

It seems to me that in the Globe article the nursing home industry and the Commonwealth are talking past each other to some extent. While it is good for all concerned that fewer people are spending years on end in nursing homes, it’s also vital that the facilities be paid enough to provide terrific care to those Massachusetts residents and taxpayers who have no other alternative. Whether that means that they should be paid a higher daily rate per resident, a global fee that covers a portion of their base cost, or some hybrid system, is not discussed in the article. The article also doesn’t discuss the fact that virtually all long-term nursing home residents today are covered by MassHealth. The high daily rates charged the few private-pay patients to some extent subsidize those on MassHealth. (Not so dissimilar from the high tuitions quoted for private colleges and universities.)

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