Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. Service Rates

12/01/2003

Rates were a major concern among respondents in all states, with agreement among state staff, providers, and consumer advocates that service rates must reflect actual costs. In states with relatively high rates, such as Wisconsin, some were concerned that providers are making too much of a profit. In states with relatively low rates, such as Florida and North Carolina, there are concerns about inadequate care.

In North Carolina, many said that the state needed to move to a case mix system, which the state hopes to do when it gets sufficient cost data and automated assessment data, sometime in 2004. In Florida, many said that the rates were insufficient to cover costs, and that the state needed to use tiered or case mix rates that were tied to nursing home rates and adjusted annually to account for increases over which providers had no control, such as liability insurance.

One respondent in North Carolina said that adequate rates for dementia care were a particular concern. The state recently enacted new regulations for dementia special care units in residential care settings, but did not authorize funding for it. As a result, few Medicaid clients with dementia are served in these units.

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