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Medicaid and Profits

Published on December 16th, 2017

U.S. News had an interesting article discussing how Louisiana’s payments to private nursing homes for taking care of Medicaid patients have risen substantially over the last decade increasing profits even as their occupancy rates stayed flat, according to an audit.  The state Medicaid program spent $8.7 billion in federal and state dollars on nursing home care for people who are elderly or disabled from 2006 through 2016, as daily rates paid to about 260 nursing homes increased 54 percent from $112.34 to $172.82.  In the last budget year that ended June 30, Medicaid payments to the facilities reached $1 billion.  Occupancy rates over the same period, however, “have generally remained the same,” growing by less than 1 percent.

One easy explanation is that the nursing home industry is powerful and a hefty campaign contributor at the state capitol.  In fact, inadequate monitoring and enforcement caused the department to fail to recoup $3.2 million in Medicaid payments for ineligible patients in 2014.

 “Even with the increasing payments to nursing facilities, Louisiana continues to rank poorly in regards to quality of care,” auditors wrote.
 Auditors also said the Louisiana Department of Health needs to improve its oversight of payments to ensure they’re accurate. They said the agency should issue penalties for late cost reports from nursing homes and tougher sanctions for facilities that have repeat audit violations.
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