A wrinkle in Medicaid’s complex funding formula is giving nursing homes owned or leased by local governments a funding boost of 30 percent per Medicaid resident, Kaiser Health News reported.
According to the news service, whose report was posted by The Washington Post, the money is sent to the hospitals, which negotiate with the nursing homes over how to divvy it up.
The technique was pioneered in Indiana, where nearly 90 percent of Indiana’s 554 nursing homes have been leased or sold to county hospitals in the past 14 years, Kaiser reported.
Though Indiana’s nursing home population has been steady at about 39,000 over the past five years, Medicaid spending for the homes has increased by $900 million, to $2.2 billion last year, Kaiser reported.
Today, more than two-thirds of Indiana’s Medicaid long-term care dollars go to nursing homes, though the national average is 47 percent.
Critics say the extra money hasn’t improved quality — and is an incentive to steer people to nursing homes rather than lower-cost options, like home health care or community-based day-care centers.
“It is a factor that has contributed to our imbalance” in care choices, former Indiana Medicaid Director Joe Moser told Kaiser.
But Steve Long, chief executive of Hancock Regional Hospital in Greenfield, Ind., told Kaiser his hospital recently built two fitness centers in the county with help from the extra Medicaid dollars that resulted from its acquisition of a nursing home.
“Welcome to health care — it’s a complex and confusing environment where we have all different competing incentives,” Long told Kaiser.