Preliminary Findings on Patient Characteristics and State Medicaid Expenditures for Nursing Home Care

In response to a congressional request, GAO presented preliminary findings on State nursing home expenditures and the characteristics of patients in nursing homes. Congress is reviewing proposed changes in the inspection and certification procedures for nursing homes.

Current inspection and certification procedures are designed to insure that nursing homes with Medicaid and Medicare residents meet certain health and safety standards. The Health Care Financing Administration has proposed revisions to these procedures which would allow biennial rather than annual inspection and which would delete the rule requiring onsite inspection within 90 days of identifying deficiencies in a nursing home. A GAO analysis of trends in the nursing home industry revealed two important considerations in the issue of whether the proposed revisions should be adopted. Patients entering nursing homes over the past several years have been increasingly dependent or disabled, requiring more extensive and potentially more costly care. At the same time, States are finding it difficult to pay the escalating cost of this care and are taking steps to reduce their nursing home expenditures. The type of care provided to Medicaid patients is likely to change significantly over the next several years. Accordingly, adequate inspection and certification procedures for nursing homes are crucial to insure that facilities meet legislated health and safety requirements. Information on trends in State expenditures for nursing homes and the characteristics of patients is important in assessing the adequacy of proposed changes to procedures.