Federal Funding of Long-Term Care for the Elderly

In response to a congressional request, GAO reported on the amount of federal funds that are being spent on long-term care for the elderly under various programs and the amount being spent for backup days of care in acute care hospitals when a lower level of care is needed but unavailable.

A Government-funded study found that at least $13.4 billion in federal and state funds are being spent under various Government programs to provide long-term care to the elderly and disabled. GAO previously reported that, even though federal law requires state Medicaid programs to provide the lower cost alternative of skilled nursing facilities (SNF's) for patients who do not require full hospital care, Ohio was not able to provide this lower cost care. Thus, many patients who could not be adequately cared for in SNF's had to be kept in hospitals where costs are much higher. Many Medicaid patients remain in hospitals primarily because SNF's are unwilling to accept them since the State's maximum rate is not sufficient to cover the cost of skilled care, and Medicare patients might become eligible for Medicaid after exhausting their resources. In the first quarter of 1979, 251,849 Medicare and Medicaid inpatient hospital days were approved because the patient was awaiting placement at a lower level of care. Because a comprehensive database does not exist, GAO was unable to collect national data on backup days approved for payment. The Omnibus Reconciliation Act requires that hospitals be paid by Medicare at the average Medicaid SNF rate in the state for backup days of care when: (1) posthospital care is needed but unavailable; (2) hospital services are not medically necessary; and (3) the patient is entitled to payment for posthospital care. GAO believes that some money could be saved by paying for backup days of hospital care at an SNF rate.