Cash-strapped hospitals seek Medicaid reimbursement by diving into nursing home market

Some hospitals are using a part of Medicaid's reimbursement formula to improve their financial footing through buying nursing homes, Kaiser Health News reports.

Here are four things to know about the trend.

1. Under Medicaid's payment formula, nursing homes owned or leased by a city or county government get additional funding. For example, Hancock Regional Hospital, a Greenfield, Ind.-based county-owned hospital, leased a nursing facility to qualify for the increased funding. In Indiana, the lease means hospitals get a 30 percent boost in Medicaid reimbursement per resident. Hospitals like Hancock Regional then negotiate how to divide the funding with leased nursing homes.

2. Indiana is one of the first states to pursue the funding increases, according to Kaiser Health News. County hospitals have leased or purchased almost 90 percent of the state's 554 nursing facilities, resulting in hundreds of millions of extra Medicaid dollars. Other states, such as Pennsylvania and Michigan, have also sought increased funding through the formula.

3. Advocates argue the process helps financially-strapped county hospitals stay afloat while rural hospitals nationwide face financial hardship.

4. However, some opponents to the practice claim the additional funding is not linked to improvement in nursing home quality. In addition, opponents argue the process slows adoption of home health services, the report states.

For the full Kaiser Health News article, click here

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