Some State Legislators Race to Add Funding as ‘Nursing Home Deserts’ Expand

Rural and small market areas continue to experience growing “nursing home deserts,” an increasing crisis for local officials and beneficiaries facing access issues.

In Nebraska, for one, state data shows 29 facilities closed their doors in the past three years, leaving pockets of “nursing home deserts” across 20 counties, according to a report from KETV Omaha.

There are 15 counties in the state without any nursing homes at all, another report with Nebraska Public Media found.


In the summer and fall of last year, providers in rural areas brought up concerns echoed in Nebraska, and the American Health Care Association added 30 counties across the country as “nursing home deserts.”

As the federal minimum staffing requirement is due to be finalized this year, rural providers say it will only exacerbate the issue of growing communities lacking nursing home care. The proposal is expected to increase the labor cost-to-reimbursement disparity, especially if reimbursement isn’t increased to help operators meet staffing requirements.

The problem is two-fold and not limited to Nebraska. The closures stem from a mix of staffing shortages and lackluster Medicaid reimbursement. Jalene Carpenter, president and CEO with the Nebraska Health Care Association (NHCA), said the gap between cost of care and Medicaid reimbursement is $49 per resident per day for Nebraska providers.


And, about 60% of nursing home residents in the state are Medicaid beneficiaries.

Right now, operators are “literally on the edge,” Carpenter told KETV, while facing a zero increase in one of their main sources of revenue.

Some operators have had to make the tough decision to adjust operating structures or take out loans in order to stay open. This also often means taking on less Medicaid beneficiaries and more private pay, Medicare patients.

NHCA supports state legislation, which would increase Medicaid reimbursement rates for nursing homes, along with another for assisted living facilities. Together, the measures would cost the state about $14 million per year while also bringing in an additional $17 million in federal funds, according to reports. 

Another state bill would provide $1 billion in federal funding to hospitals, and legislators are looking to see if some of that money could go toward nursing homes as well, according to the KETV report.

This would be on top of Medicaid rebasing in July 2023 using 2022 cost report data, Carpenter told Skilled Nursing News in a previous article. The state also approved an additional $70 million in Medicaid funding as of July 2022. Prior to the infusion of the latest funding, the gap stood at $70.19 per patient day.

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