Why Vacant Nursing Home Beds Are on the Rise in Pennsylvania Amid a Funding Crisis

Nursing homes in Pennsylvania face a critical underfunding of Medicaid, with one in four nursing home beds currently offline due to inadequate reimbursement.

Survey findings from LeadingAge PA also point toward the continuing workforce shortage, as to why so many beds are not in use. About 48% of facilities in the state have had to decline hospital referrals in the past two to three months as well, despite having licensed capacity, according to the survey.

That’s nearly 25% of beds taken offline due to the workforce shortage and paltry reimbursement rates, LeadingAge PA President and CEO Garry Pezzano said in a statement. The number one cause for reducing capacity was inadequate nursing aide staffing, followed by insufficient Medicaid reimbursement, and then a low number of licensed practical nurses (LPNs).


In Pennsylvania, the senior population, or those age 65 and older, exceeds 2.2 million people; nearly 70% of the senior population relies on Medicaid for their long-term care. In other words, state reimbursement rates are a critical factor when one considers access to nursing home services.

One provider in Allegheny County said they had to shut down a sister community that was almost entirely Medicaid, after years of losses – in the millions of dollars – as a result of lower Medicare Advantage rates. The facility could no longer subsidize the subpar Medicaid funding, with MA paying less than traditional Fee-for-Service (FFS) Medicare.

It’s an issue touched on before, most recently by industry experts at Zimmet Healthcare Services.


“Our staffing challenges are too severe to consider bringing beds back online. Increased funds are needed to retain the staff we have and to be able to recruit for the beds already online,” one provider in Adams County said as part of the survey.

An overwhelming 93% of providers in the state would increase wages for new hires and existing staff if Medicaid funding were raised, LeadingAge PA reported.

About 67% of respondents said they were unable to bring beds back online in the last year. Of the 32.6% that were able to bring beds back, the number one reason was the ability to hire more staff after a pay rate increase.

“The world of nonprofit skilled nursing centers is becoming a thing of the past due to decreased reimbursement, increased regulations and staffing issues,” another provider in Montgomery County said in the survey.

Currently, just under 80% of providers are using agency staff to fill nursing positions at all levels.

The association is advocating for a $70 million increase in Medicaid for nursing homes as part of the 2024-25 state budget, along with at least $8.9 million for the state’s Living Independence for the Elderly (LIFE) program, which offers home and community-based services.

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