Nursing Homes Costs May Rise with Medicare Reimbursement Change

The current high cost of nursing home care makes it important for residents to plan ahead to determine how they will pay for these services. In fact, with nearly 75% of local residents over 65 years old likely to need long-term care at some point, creating an elder care plan is becoming a virtual necessity. Nursing home costs in our state are consistently near the most expensive in the entire country, and so many community members visit our New York elder law attorneys to learn about their options to prepare for this expensive care.

According to an article in yesterday’s Smart Money, recent federal cuts to many long-term care facilities throughout the country may result in even higher nursing home costs. The possible increases are linked to a decision from the Centers for Medicare and Medicaid Services (CMS) which announced late last month that it will begin cutting reimbursement rates to these facilities by 11.1%. CMS officials explained that the step was necessary to make up for a $4 billion shortfall last year. This reimbursement reduction will take place beginning in October. Many observers believe that the change will indirectly pressure many of these facilities to increase the cost on residents to make up for the shortfall. The CMS cost-cutting measure has spooked already jittery investors who worry that their profits will shrink as a result of the change. Even before this announcement the cost of local nursing home care increased 5% this year from last year.

Unfortunately, some also suggest that even with the price increase, services at these homes will likely be cut. Medicare payments are responsible for 20% of revenues for the average nursing home. Considering that many of these facilities are run by public companies with shareholders, there will be strong pressure to cut costs in any way possible to make up for the revenue reduction. Many fear that nursing home quality will be affected.

No matter what happens it is important to remember that nursing home residents can always seek to negotiate for extra amenities or a room upgrade. Public websites like are a helpful starting point to compare nursing home costs and features. Residents in our area should also be aware that with proper New York elder planning they can take steps to ensure that they have the resources necessary to avoid nursing homes altogether and receive care in their own homes. In addition, if a condition arises where a nursing home stay is unavoidable, a proper elder law plan can ensure that assets built up over a lifetime are not spent paying for the staggering cost of this care.

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