Summary: GAO presented information concerning Medicaid and nursing home care across the States. Because the Nation's elderly population is increasing rapidly, an increase in future demand for nursing home care can also be expected. This trend will strongly impact Medicaid which is the major payer of nursing home care costs. GAO found that: (1) most State reimbursement systems are not designed to pay for the cost of each patient's care needs; (2) States are trying to limit their bed supplies because of their effect on Medicaid expenditures; and (3) attempts to reduce hospital backup may be expensive. GAO made several concluding observations: (1) improvements are needed to increase the efficiency of Medicaid nursing home services; (2) better reimbursement systems and other incentive mechanisms need to be developed; and (3) adequate utilization review and survey and certification procedures are important. GAO stated that research is needed to determine whether some individuals could be served in settings other than nursing homes and whether there is justification for the variation in the number of nursing home beds between States. GAO also concluded that serious information gaps exist in basic Medicaid data.
