MADISON (WKOW) — Wisconsin reimburses nursing homes through Medicaid at a lower level than every other state surveyed in a 2015 study released by the American Health Care Association this week.
The study found Wisconsin’s skilled nursing home facilities faced a $53 shortfall for each patient per day when compared to how much they were being reimbursed by the state through Medicaid – a federal/state funded health insurance program for the poor, which is administered by the Wisconsin Department of Health Services.
The study found the projected cost to a facility for each Medicaid patient day was $221 in Wisconsin, but the state reimbursement was just $168 or 76 percent of that cost.
North Dakota and Virginia had the highest Medicaid reimbursement rates, with each state providing a reimbursement surplus to nursing homes of $2 per day in ND and $0.32 per day in VA.
Of Wisconsin’s neighboring states, Iowa had the best reimbursement rates with a shortfall of just $12 per patient day. The shortfall in Illinois was $25 and $34 in Minnesota.
At Oakwood Village retirement communities in Madison, about 20 percent of the nursing home residents get their care paid for through Medicaid.
But about $100 of the cost to care for each Medicaid patient, each day, isn’t covered due to the state’s reimbursement shortfall.
“Not having a Medicaid reimbursement to offset your true costs doesn’t allow you to have any cushion at all to have salaries or wages for staff that compete with our competitors,” said Michelle Godfrey, Oakwood Village Chief Operating Officer.
Those competitors aren’t just other nursing homes, but hospitals and other medical clinics for registered nurses and even jobs outside of the long-term care industry for nursing assistants – who often start at less than $12 per hour.
“Facilities are having to make those tough choices of ‘can I afford to have my Medicaid occupancy increase and still be able to provide high quality care and provide wages and benefits that people really deserve?,'” said John Sauer, president of the senior advocacy group LeadingAge Wisconsin.
Because of that reimbursement shortfall, private individuals who can afford to pay for nursing home care at Oakwood Village and other facilities like it are also picking up part of the tab for those Medicaid patients.
“So, there are needs that must be met and if Medicaid’s not paying for it, someone does or facilities close, worst case scenario,” said Sauer.
The 20 percent Medicaid population at Oakwood Village is low.
The average nursing home in Wisconsin has 65 percent of its residents on Medicaid. Those homes don’t always have a private payer base to draw from to close the gap.
“More facilities are going to reduce their bed capacity, so they’re just going to serve fewer people,” said Sauer. “And we’re saying if the state could at least come closer to meeting the cost of care – particularly in the area of direct care – I think the taxpayers would welcome that, frankly.
Since 2012 – the state’s reimbursement rate paid out through the Department of Health Services has increased by about 4 percent.
“The Department of Health Services (DHS) does not have cost-based reimbursement for nursing homes,” wrote DHS Spokesperson Claire Yunker in a statement sent to 27 News. “Our most recent analysis suggests that most nursing homes in Wisconsin break even or make a small profit, when including Medicare and private pay revenues.”
Because the study doesn’t take Medicare reimbursement – paid out to all seniors – or other factors into account, DHS officials say it is flawed.
“Therefore it is correct that, when ignoring other forms of revenue (Medicare and private pay) nursing homes do not receive the full cost of providing services to Medicaid residents. However, the extent of the losses are overstated in this report because the report uses unaudited data,” wrote Yunker.
But Sauer claims profits for Wisconsin’s private nursing homes, even when taking Medicare payments into account, only averages two percent.
“We’re providing high quality care under very difficult circumstances and we’re seeing that in the budget process we need to be given higher priority,” said Sauer.