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Medicaid Underpayments Reach Record Levels  
Medicaid Underpayments Reach Record Levels
Medicaid underfunds nursing center providers by $7 billion in 2012
Claire Navaro
(202) 898-6317


Washington, DC – The American Health Care Association (AHCA) today released a report by Eljay, LLC, which demonstrates the Medicaid program fails to fully pay providers who are caring for the nation’s most financially defenseless citizens. The annual study, titled A Report on Shortfalls in Medicaid Funding for Nursing Center Care, projects that Medicaid underpayment to providers will exceed $7 billion nationally. On a per-resident, per-day basis, the average 2012 projected shortfall amount is $22.34. This is the largest shortfall reported since the inception of the study in 1999.
“There’s a lot of talk in Washington about Medicaid and how it’s ripe for cuts,” said AHCA President and CEO Mark Parkinson. “This report offers hard data that argues the opposite. The reality is that this program already underpays nursing center providers. Cuts to Medicaid do not make sense for providers or for the millions of Americans who depend on the program”
Highlights from the report include:

  • The 2012 Medicaid shortfall is projected to exceed $ 7 billion nationally.
  • The estimated average Medicaid shortfall for 2012 of $22.34 per Medicaid patient day is 14.3 percent higher than the preceding year’s projected shortfall of $19.55.
  • For a typical 100-bed facility in which 63 percent of residents rely on Medicaid for coverage, this shortfall would mean a loss of more than $500,000 annually.
  • Between 2010 and 2012, allowable costs increased an average of 4.2 percent, while Medicaid reimbursement rates only increased an average of 2.5 percent.

“As a researcher and author of this study for the past decade, I see adequacy of Medicaid payment for nursing facility services continuing to decline to their lowest point since the inception of the study,” said Joe Lubarksy, President of Eljay, LLC. “I don’t predict any significant shifts until there are significant improvements in state economies, and even then, the trend will continue to be towards a higher priority of funding for non-institutional services.”

State-by-state Medicaid underpayment data is available on the AHCA website. The full A Report on Shortfalls in Medicaid Funding for Nursing Center Care document is available here.

The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) represent more than 13,000 non-profit and proprietary skilled nursing centers, assisted living communities, sub-acute centers and homes for individuals with intellectual and developmental disabilities. By delivering solutions for quality care, AHCA/NCAL aims to improve the lives of the millions of frail, elderly and individuals with disabilities who receive long term or post-acute care in our member facilities each day. For more information, please visit or