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Nursing Homes: Aggregate Medicare Payments Are Adequate Despite Bankruptcies

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Report Type Reports and Testimonies
Report Date Sept. 5, 2000
Report No. T-HEHS-00-192
Subject
Summary:

Aggregate Medicare payments for nursing home services likely cover the cost of care needed by beneficiaries, although some refinements to the payment system are needed. However, Medicare policy changes have required many nursing homes to adjust their operations. Those homes that took advantage of Medicare's previous payment policies and who financed inefficient and unnecessary care delivery and those companies who provided ancillary services have found the changes to be disruptive. Their problems are the result of business decisions made when Medicare exercised too little control over its payments. Filing for bankruptcy protection under Chapter 11 gives these providers time to restructure their debts and streamline their operations while continuing to care for their nursing home residents. Should any of these providers not emerge from bankruptcy, the nursing homes will be sold and the residents may have to find alternative care arrangements.

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