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Nursing home reimbusement steady despite other state cuts

Dec. 16, 2003 -- Despite cuts in in-home services such as those proposed in California, nursing home reimbursement rates have remained steady in most cases, according to a report by the General Accounting Office. Of the states studied for its report, "only Illinois, Massachusetts, Michigan, and Texas cut the per diem rates paid to all nursing homes" during fiscal years 1998 through 2004. "In over three-quarters of these states, nursing home per diem rates grew, on average, by an amount that exceeded the skilled nursing facility market basket index, the index used by the Centers for Medicare & Medicaid Services to measure changes in the price of nursing home goods and services for Medicare."

The GAO report notes that "almost half of all Americans over the age of 65 will rely on nursing home care at some point in their lives, and two in three nursing home residents have their care covered at least in part by Medicaid. Under Medicaid, states set nursing home payment rates and the federal government reimburses a share of state spending," says the GAO report.

"According to the most recently available data, Medicaid nursing home expenditures exceed $43 billion, and total Medicaid spending for fiscal year 2003 is expected to double by 2012," says the report.

For the report, GAO interviewed state and nursing home industry officials in 19 states and obtained documentation about nursing home payment rates and methods, including state methods to determine nursing home per diem rates for fiscal years 1998 through 2004. "Although each of the 19 states experienced recent fiscal pressure, states' nursing home payment rates have remained largely unaffected," reported GAO.

Read report at


  • Department of Health and Human Services, Centers for Medicare and Medicaid Services: Medicare Program; Revisions to Payment Polices Under the Physician Fee Schedule for Calendar Year 2004. GAO-04-266R, November 19, 2003 (4 pages).

  • National Council on Disability analysis of federal and state implementation of the Supreme Court's Olmstead decision.





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