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New National Medicaid Study: Minnesota Under Funds Seniors' Nursing Home Care $167 Million Annually

Analysis Finds Minnesota's Seniors Face Fourth Highest Shortfall Nationally;

Per Patient Day Shortfall is $24.96.

WASHINGTON, Oct. 4 /PRNewswire-USNewswire/ -- A new independent analysis of the nation's Medicaid program by the accounting firms BDO Seidman/Eljay,LLC estimates states are under funding the actual cost of providing seniors' critical nursing home care by at least $4.4 billion annually -- representing a dramatic 45 percent increase from 1999 ($9.05) through 2007. Minnesota's Medicaid rate currently under funds senior's care by $24.96 per patient day, well above the average national shortfall of $13.15 per patient day.

The new study found that Minnesota's seniors face the forth highest shortfall on a national basis. The new study also found that the states with the greatest disparity between the actual cost of providing quality care and Medicaid reimbursements are, in order of severity, Illinois, New Jersey, Wisconsin, Minnesota, Vermont, New Hampshire, Missouri, Delaware, Washington and Massachusetts.

"The long term trend lines show an unmistakable growth in the disparity between the cost of providing quality care and the actual amount reimbursed by government," said Patti Cullen, President and CEO, Care Providers of Minnesota. "One of the unfortunate results is that our ability to find, train and retain key direct care staff is compromised, and ongoing quality improvement initiatives are placed in jeopardy," Cullen continued. "This problem is national in scope, and requires a national solution that starts with reforming the entire Medicaid and Medicare financing structure."

According to the BDO Seidman/Eljay analysis, seniors' Medicaid-financed long term care needs suffer the highest cost/reimbursement rate disparities in the following states:

Rank State Per Patient Daily Shortfall

1 Illinois $30.21

2 New Jersey $28.64

3 Wisconsin $27.29

4 Minnesota $24.96

5 Vermont $24.32

6 New Hampshire $22.99

7 Missouri $22.62

8 Delaware $22.21

9 Washington $20.71

10 Massachusetts $19.85

In releasing the new report at a Capitol Hill briefing on pending FY 2008 health and budget issues, Bruce Yarwood, President and CEO of the American Health Care Association said it is essential for policymakers, key legislative staff and all long term care stakeholders to understand the growing inter-dependence between Medicaid and Medicare -- and how according to the study's findings, the long term care sector operates at a 2.5% negative margin when factoring both Medicare and Medicaid funding into the overall long term care financing equation.

"As federal and state lawmakers consider cuts or freezes in either Medicare or Medicaid the significance of the overall negative operating margin cannot be discounted," Yarwood added. "These findings are further evidence that policymakers and the Medicare Payment Advisory Commission should take into account the symbiotic nature of Medicaid and Medicare financing as key healthcare funding decisions are made."

In further explaining the role of Medicare in subsidizing Medicaid shortfalls, Joseph Lubarsky, the study leader said, "Medicare continues to play an important role in the cross-subsidization of Medicaid deficits... un-reimbursed Medicaid allowable costs are projected to exceed $4.4 billion, and providers must continue to substantially rely on Medicare prospective payment in an attempt to break even from government funded programs. Any major slowdown in state economies or changes in federal policies or interpretations regarding federal revenue enhancement programs could easily reverse the positive trends of the past few years."

Information on the methodology and the complete report is available at HYPERLINK ""

SOURCE Care Providers of Minnesota
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