Medicaid Underpayment to Grow to $7 Billion by End of 2012

A new report shows that Medicaid underpayments are expected to exceed $7 billion by the end of 2012, averaging out to a shortfall of $22.34 per resident day. In 2010, that figure was $18.54. The report was commissioned by the American Health Care Association (AHCA).

The following factors are likely to keep the situation from improving in the future:

• Dual-eligible integration, which will likely have implications for both Medicaid long-stay residents and Medicare-paid post-acute care average length of stay
• Reduced occupancy rates driven by government-encouraged expansion of home- and community-based services
• Managed care plans for Medicaid beneficiaries

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