Olmstead and Nursing Homes - Information Bulletin #25

In an era of medicaid deficits, one way your State could show their intent to comply with Olmstead - and not spend any new funds - is to use the concept "Let the Medicaid Money Follow the Individual." This would use medicaid funds, currently allocated by your State to pay for nursing home beds, to pay instead for community services, when the person chooses to live in the community.

Specifically, most states use a formula to pay nursing homes for the total number of beds, whether or not people use them (e.g., reimbursements include mortgage payments, utilities, capital costs based on the total number of beds - not residents). Payments to nursing homes for unused beds become part of a line item in the State budget, at the same time people are denied community-based services. It's critical to remember that, according to the American Health Care Association, the average cost of nursing home is $41,000 per year, while community services are on average much cheaper.

The money spent on the person in the nursing home could be moved with the individual when the person chooses to live in the community. Texas and Missouri have "riders' on their budget bills that allow the "Medicaid Money to Follow the Individual."

The following things happen if your State were to have the medicaid money follow the Missouri and Texas examples:

  1. The shift to the community would be cost neutral.
  2. States would demonstrate a strong policy commitment of "real choice" for persons with disabilities of all ages.
  3. Closing ("decertifying") unused beds shows that your state believes in "community first."
  4. It would actually save medicaid funds over time.

Below are nursing home bed vacancy rates by State. Every State could easily decertify and close nursing home beds when people choose to live in the community. This saves money which could then be allocated for community-based services. Given the percentage of unused and vacant nursing home beds, States could decertify beds and STILL have vacancies.

Nursing Home Beds Vacancy Rates by State

Alabama 9%; Alaska 29%; Arizona 20%; Arkansas 39%; California 22%; Colorado 16%; Connecticut 8%; Delaware 17%; D.C. 9%; Florida 26%; Georgia 9%; Hawaii 8%; Idaho 27%; Illinois 25%; Indiana 25%; Iowa 34%; Kansas 19%; Kentucky 10%; Louisiana 23%; Maine 10%; Maryland 17%; Mass.11% ; Michigan 16%; Minnesota 6%; Mississippi 11%; Missouri 30%; Montana 22%; Nebraska 17 %; Nevada 22%; New Jersey 14%; New Mexico 13 %;New York 6 %; North Carolina 12%; North Dakota 7%; New Hampshire 10%; Ohio 32%; Oklahoma 31%; Oregon 28%; Pennsylvania 13%; Rhode Island 12%; South Carolina 11%; South Dakota 8%; Tennessee 11%; Texas 30%; Utah 28%; Vermont 11%; Virginia 14%;Washington 17%; West Virginia 9%; Wisconsin 16%; Wyoming 18 %; USA 19%. (Source: OSCAR, January 07, 2002. Data are from current surveys of nursing homes. )


Steve Gold, The Disability Odyssey continues

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