LTC Bullet: Low Medicaid Reimbursement Takes Toll

Wednesday January 26, 2000


The January 14th issue of McKnight's Long-Term Care News reports that 88 Massachusetts nursing homes with a total of 10,208 beds have sought bankruptcy protection in the last year due in large part to low Medicaid reimbursements. This represents more than 15% of the state's nursing homes and more than 17% of its beds. In the past four years, Massachusetts facilities have lost $77 million.

Medicaid covers the cost of care for seven out of ten Massachusetts nursing facility residents, but less than one in four facilities receives enough money to cover the cost of care, according to the Massachusetts Extended Care Federation.

Federation President Ned Morse is quoted in the article stating: "If the system continues to melt down, we will jeopardize the care for the most vulnerable citizens among us." The Federation's response, however, is to advocate higher Medicaid reimbursements.

While Medicaid reimbursement levels are clearly too low, the crux of the problem is overutilization. The Medicaid program was never intended to support 70% of Massachusetts' nursing home population. Moreover, generous eligibility rules and widespread Medicaid planning-- which anesthetize the public to the risk of long-term care--leave little doubt that nursing homes in Massachusetts will see their Medicaid census continue to increase.

Only public policy which encourages private financing holds any hope of securing providers' financial survival. Only when providers achieve financial stability can they be expected to focus on delivering high quality care. The Center for Long-Term Care Financing's "LTC Choice" report provides a blueprint for public policy reform that will relieve dependency on Medicaid and encourage private long-term care financing.

Order a copy of "LTC Choice" [$24.95; free to media and lawmakers] by contacting us toll free at 1-877-557-3627 or emailing

Source: "Group Proposes New Medicaid Rate After Facilities Go Broke," McKnight's Long-Term Care News, January 14, 2000, Vol. 21, No. 1, p.10.