Study Reveals Frozen Medicaid Payments to SNFs in 40 States

Between 2010 and 2012, skilled nursing facilities in 40 states across the nation dealt with Medicaid payment rates that were either cut or frozen, highlighting the importance of stabilizing federal nursing home rates, according to a recent Avalere survey.

“These findings speak to the financial pressures nursing facilities face on the Medicaid front,” said Emil Parker, lead author of the Avalere study, in a statement.  “In fact, while the general perception is that the state fiscal picture is improving, the number of states reducing nursing facility Medicaid rates rose from seven in fiscal year 2010 to 16 in fiscal year 2012.”

Nearly half of all states, at 23, reduced nursing facility payment rates during at least one year between 2010 and 2012, and another 17 froze rates during at least one (and more often more than one) of those years.


“The Avalere data adds important context in helping to objectively assess the true level of instability facing the SNF sector as crucial budgetary and regulatory decisions are pending action,” said Alan Rosenbloom, President of the Alliance for Quality Nursing Home Care.

Further, due to legislative and regulatory changes in the last five years, SNFs will absorb $127 billion in Medicare reductions throughout the fiscal years 2012-21 budget window, Rosenbloom added.

A previous national Avalere survey of skilled nursing facilities finds regulatory changes made by the Centers for Medicare and Medicaid Services (CMS) to reduce Medicare reimbursements (where were effective Oct. 1, 2011) are projected to result in the loss of up to 25,000 SNF jobs, Rosenbloom said, and it could mean that another 25,000 jobs are not created as facilities cancel expansions and renovations due to budget crunches.


“Federal policy makers cannot ignore the deteriorating Medicaid situation when determining Medicare rates,” he continued. “Medicare and Medicaid populations overlap in the SNF setting, and skilled nursing facilities budget based on their revenues from all payers. Profit margins for skilled nursing remain the lowest of any healthcare sector, and we urge Congress to sustain Medicare rates for the benefit of patients and workforce stability.”

The Avalere survey found just 11 states that were not adversely affected by nursing facility Medicaid rates.

View the Summary of Reductions and Freezes in State Medicaid Nursing Facility Payment Rates here.

Written by Alyssa Gerace

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