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Medicaid Spending on Long-Term Care: The Real Numbers

Executive Summary

Date: September 1st, 2004

This paper demonstrates that the above statement about New Hampshire is wrong because it is based on incorrect data. Policy assertions that may have flowed from the data are therefore suspect. In fact, about 55 percent of New Hampshire’s Medicaid spending for long-term care is for nursing homes, close to the national average of 53 percent. About 4% of the elderly population in both states are enrolled in Medicaid and are being cared for in nursing facilities. Vermont spends only about 41 percent of its long-term care money on nursing homes primarily because it provides other Medicaid services to a much larger percentage of its non-institutionalized elderly population than does New Hampshire.  Just because statements like the one quoted above have been included in official NH Department of Health and Human Services (DHHS) documents and have been cited by the news media does not make them true.
 
Unfortunately, the truth will be again obscured when the federal Centers for Medicare and Medicaid Services (CMS), the part of the US Department of Health and Human Services responsible for Medicaid management, releases data soon that will purport to show that in 2003 only 44 percent of New Hampshire’s long-term care Medicaid spending was for nursing homes. New Hampshire’s spending on nursing homes will be reported to have fallen from $299 million in 2002 to only $138 million in 2003. The data for both years are wrong.  The misunderstanding of the true situation in New Hampshire flows from quarterly financial reports DHHS submitted to CMS. Those reports in federal Fiscal Year 2002 incorrectly claimed about $75 million too much in nursing home spending. National studies have simply compiled and used the data for 2002 that New Hampshire originally submitted and have reported it as fact. DHHS did submit an adjustment to those 2002 numbers a year later. That adjustment will soon result in the erroneous appearance that New Hampshire reduced its spending on nursing homes dramatically in 2003.
 
For whatever reason, DHHS has cited the national sources instead of relying on its own internal data and financial systems. This in turn has led to the incorrect implication that the rates that nursing homes charge in New Hampshire must be extraordinarily high and ultimately to a statement such as "Nursing homes must change their way of doing business."
What is an appropriate mix of institutional and community-based long-term care? How should Medicaid eligibility for nursing home and community services be structured? These are legitimate questions that deserve answers. The answers deserve to be revisited with regularity. Programs and policies need to achieve a mix of services that meet real needs as efficiently and compassionately as possible. Planning and policy-making to achieve that end, however, must proceed on the basis of good data.

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