A Comparative Study: Nursing Homes With or Without Medicaid Clients

Today, I had a fascinating discussion with a gentleman (who will remain unnamed.  I will call him Joe). (BTW: The veracity of the information in this blog is not based on my first-hand knowledge, it is based on Joe’s).  For years,  Joe owned a nursing home ( he recently sold it).  He explained that he never accepted over 20% Medicaid clients. His friend, Bill (also unnamed) also owned a nursing home. Bill accepted 100% Medicaid clients. So let’s explore the differences between the two nursing homes.

Joe’s: The nursing home was brand new. Joe had the building built with state-of-the-art medical access (pre-wired for medical equipment, etc.). The staff was exceptional. The beds were the kind that you can lay down or sit up; the beds also vibrated at certain times of the day to prevent bed sores. Each room had a television. The cafeteria provided an array of healthy foods.

Bill’s: The nursing home was located in an old concrete building. The nursing home met all the minimal requirements in which to meet the criteria to receive its Certificate of Need (CON). There was staff.  There were beds, but not the movable type, just basic single beds. There was food.  Residents and family of residents complained often about the living conditions, but the nursing home met the state’s minimum requirements.

Joe’s: The nursing home was profitable as long as it kept the number of Medicaid recipients to a minimum. Many times Medicaid recipients were turned away.

Bill’s: The nursing home was profitable as long as he kept his staff to a minimum and quality of food, beds, cafeteria meeting the minimum requirements.

What I extracted from Joe’s comparison between the two nursing homes, was that Medicaid recipients, for the most part, were receiving less quality care than those with private insurance. Fair?

You have to ask yourself why was Bill’s nursing home profitable with all Medicaid clients? Because the Medicaid clients were housed in a nursing home that only met minimum standards.  Bill’s nursing home was a concrete block building.  There were neither TVs nor upgraded medical equipment.  By keeping his overhead at a minimum, Bill was able to make a profit off Medicaid clients.

On the other hand, Joe’s state-of-the-art nursing home had to limit the number of Medicaid recipients in order to maintain a profit.

Why does Medicaid pay so little to health care providers? With all the money going into Medicaid budgets/funds, why can’t more be allocated to paying higher reimbursements to health care providers?  It seems to me that, if you agree that Medicaid is a needed program, you would agree that the Medicaid recipients should also receive quality health care. Personally, I would much rather end up in Joe’s nursing home rather than Bill’s.


About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on February 7, 2013, in Health Care Providers and Services, Medicaid, Medicaid Funds, Medicaid Reimbursement, North Carolina, Nursing Homes and tagged , , , , , , , . Bookmark the permalink. 2 Comments.

  1. Thanks for the post, and reading articles like these make me nervous. Because I need to start looking for a senior home care in Tucson for my mother. And I’m just worried that she might get mistreated there… but she’s still a tough old broad, so I think she’ll be fine for a little while more.

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