Medicare Cuts to Nursing Home Industry
Published on March 24th, 2018
The Republican budget includes a series of cuts to long-term health services. According to an analysis by the Congressional Budget Office, the new legislation reduces direct Medicare funding for nursing homes by $1.9 billion over 10 years – or $140 million starting in October.
For the facilities, Medicare provides the steadiest source of revenue, allowing them to make up for alleged shortfalls from other funding sources such as Medicaid. Medicaid – the federal program available to the elderly, low-income and those with disabilities – pays notably poorly. Facilities typically serve three types of patients: those with low incomes who use Medicaid to pay for long-term stays; those who use Medicare for shorter stays after hospital discharges; and those paying with private money. But between the three, reimbursement varies widely.
Medicare delivers higher payouts, covers a broader range of costs and comes with more certainty. Even though Medicare patients have comparatively relatively short stays – they’re capped by law to 100 days – the overall revenue they bring in can stem the losses incurred by Medicaid patients.
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