APPENDIXES

NURSING HOME CARE PROGRAMS

1565

SUBJECT: Per Diem Rate Study Community Nursing Home Care Program

1. In April, 1966 we conducted a study of per diem rates for the Community Nursing Home Care Program. At that time our experience indicated that 94% of the nursing homes under VA agreement were charging a per diem rate ranging between $8.50 to $10.50. The $10.50 rate was the maximum rate allowable by law at the time. We have updated the rate study to include the period May 1, 1966 thru April 28, 1967.

2. 2,097 agreements negotiated through April 28, 1967, indicate the following per diem range:

It should be noted that field stations were notified of the maximum per diem rate increase from $10.50 to $11.50 on March 13, 1967 (CMD's Letter No. 67-9) and that most stations had not re-negotiated their agreements when the rate study was conducted.

VA NURSING HOME CARE PROGRAMS

4. In our study of April, 1966 we examined State Welfare Program rates
for nursing home care. At that time, which was prior to the inception
of the Medicare program, welfare programs supported a per diem cost on
a national average of considerably less than the VA maximum per diem
rate. The average range for all State Welfare Programs was $150 to $250
per month, and offered mostly personal services as opposed to the skilled
nursing care required by the VA. With the advent of Medicare, states
have upgraded their standards and increased their per diem rates.

c. Medicare, Title 19

to $517 ($17.23)

(LAOPC)

Rate Range in rural or semi-rural area
(population 100,000 or less) located beyond a 50 mile radius
of reporting hospital.

5. 88% of all agreements secured (thru 4-28) are in the rate range of $9.51 - $11.50.

6. Although 2,097 agreements have been secured representing over 155,000 beds, all facilities possessing contracts will not accept VA patients. Consequently, the number of agreements consumated is not the only significant factor in determining availability of contract beds. Many homes will keep contracts but will not accept VA patients under one guise or another. 7. 72% of all agreements not secured are in the rate range of $11.51 to $16.50. If the maximum per diem formula is increased to 45% of our GM&S Hospital per diem, the maximum per diem rate will increase to $16.34 by 1968. 8. 81 agreements have been terminated during the period January 1, 1966 to April 28, 1967 because their rates are in excess of the VA maximum. These terminated agreements are in areas where the need for beds is greatest. All of the terminations occured at stations in communities where the population is over 50,000 except one (Newington).