Indiana nursing homes suffer $2.6 billion Medicaid diversion

Indiana nursing homes are facing serious staffing problems because more than $2.6 billion in Medicaid funds have been diverted to county-owned hospitals. This has left many facilities struggling to care for elderly residents, even though they received billions in extra Medicaid payments. The financial data from The Indianapolis Star shows that county hospitals are keeping nearly half of the funds generated by nursing homes over the past 15 years. Much of this money, meant for improving conditions, goes towards expenses like building new hospital facilities. For example, funds from nursing homes were used to help pay for a new $754 million hospital in Indianapolis. County-owned nursing homes receive higher Medicaid payments than private ones, but much of this extra money does not reach the nursing homes. Instead, hospitals often use it for projects unrelated to patient care. This situation has been highlighted following a lawsuit that forced some hospitals to disclose their financial records, which they had previously kept secret. Critics argue that the diversion of funds harms nursing home residents, many of whom experience neglect due to low staffing levels. A recent study found that even when nursing homes receive additional Medicaid funding, most of it goes toward administrative costs rather than direct care. Currently, Indiana nursing homes rank last in the nation for nursing staff hours per resident, which has been linked to preventable injuries and deaths among residents. Hospital executives defend the practice, claiming that it benefits both hospitals and nursing homes by ensuring access to federal funding. However, experts stress the need to ensure that more of the Medicaid funds go directly to improving care at nursing homes. Calls for reform have emerged, urging lawmakers to link Medicaid payments directly to staffing levels and quality of care in these facilities. Yet, neither state nor federal Medicaid officials have taken action against the ongoing diversion of funds.