Report says Medicaid is underfunding nursing homes

A new study indicates Medicaid programs in states across the country underfunded nursing facility care by $5.6 billion in 2010, paying on average $7.17 per hour per patient, less than the nation's current minimum wage of $7.25 per hour.

Medicaid funds 64 percent of the care provided in America's skilled nursing facilities.

"This report reveals a truth many would not believe – today's nursing facilities are paid less than the minimum wage," said Mark Parkinson, president and CEO of the American Health Care Association. "That must change if we ever hope to serve the needs of a Baby Boom generation that will only stress our care delivery system further."

Compiled by the research group Eljay, the report identifies which states are most affected by the rising pressure on state Medicaid budgets, both in terms of highest aggregate Medicaid underfunding and highest per-patient per-day underfunding.

States topping those lists are New York, Illinois, Massachusetts, Minnesota, New Jersey and Wisconsin.

The study indicates nursing home providers are often forced to rely on funding from other sources – primarily Medicare – to fill in the funding gaps resulting from inadequate Medicaid payments. With many governors facing difficult choices surrounding budget cuts, Parkinson cautioned at the danger of allowing an already squeezed Medicare system to prop up Medicaid payment rates.

"There is a vast gap between the actual cost of providing quality elder care and what the Medicaid program truly finances," Parkinson said. "As Baby Boomers begin to ponder their long term care needs in the future, it is simply unsustainable for Medicare to continue filling that financial gap. As current trends indicate, this problem will only grow worse in the coming years."

States with the largest aggregate Medicaid underfunding:

1. New York – $1,396,494,595;
2. Illinois – $378,779,709;
3. Massachusetts – $310,871,237;
4. New Jersey – $304,430,314;
5. California – $288,599,289;
6. Pennsylvania – $277,609,403;
7. Ohio – $248,513,290;
8. Wisconsin – $181,237,562;
9. Minnesota – $151,611,752;
10. Missouri – $137,412,649.

States with the largest Medicaid per-patient par-day underfunding:

1. New York – $47.95;
2. New Hampshire – $31.25;
3. Massachusetts – $31.22;
4. New Jersey – $29.29;
5. Washington – $28.18;
6. Wisconsin – $26.54;
7. Minnesota – $24.70;
8. Wyoming – $23.67;
9. Delaware – $22.86;
10. Illinois – $21.95.