1. The MedPac article above has the commission claiming that reimbursement rates are high because of “high and sustained Medicare margins" in the "double-digits." One wonders what the definition of "margin" is because a double-digit operating margin is usually required for any business to remain in business.

    Once a business' operating margin gets into the single digits, it's often difficult to make the necessary investments in non-operating costs like financing renovations & technology investments, paying for raises, having appropriate back-office support like management oversight of operations and expansion into new business lines (such as a nursing home reducing its business risk by purchasing or starting home health services).

    The MedPac report seems like a very detailed report but even with the details presented, may not give a full picture of the payment and cost structure of any single nursing home who caters to multiple payor sources.
    Chris Foley
    CPA (Retired)
    Sr. V. P.
    Equity National Seniors Housing Brokerage & Advisors