Long-term care facilities in Upstate New York receive an average reimbursement of $236 per person per day. It costs an average of $331 per day to care for each resident. Reimbursement for Downstate facilities is much higher
By Deborah Jeanne Sergeant
Long-term care facilities play a vital role in providing safe, nurturing homes for people who need full-time care, along with short-term rehabilitative environments for people discharged from the hospital after an illness, injury or surgery.
For decades, the Medicaid reimbursement funding for long-term care facilities in Upstate New York has lagged behind that of Downstate facilities, despite fewer residents Upstate using private pay options compared with Downstate.
“I don’t think we’re turning the corner,” said Joe Murabito, owner and managing partner of Elemental Management Group in Oswego, which operates several nursing homes and manages more. “The average cost Upstate for 2024 was $331 [per person, per day]; the average reimbursement from Medicaid is $236. That is $95 a day less than the average cost. The expectation is that you’ll have good outcomes.”
According to Medicaid rate data compiled from the New York State Department of Health and reflected in the accompanying analysis, more than 180 Upstate New York nursing homes operate at Medicaid reimbursement rates below $225 with dozens near or well below $200. Medicaid reimbursement rates for many Downstate facilities in New York City and nearby counties receive hundreds more per person, per day.
“These disparities exist despite shared regulatory requirements, staffing mandates, and escalating costs for labor, food, insurance, utilities and compliance — cost pressures that do not diminish simply because a facility is located outside the metropolitan region,” Murabito said.
That $200 provided to Upstate facilities is expected to provide meals, housing, utilities, 24/7 trained caregivers, medical care and resident recreation. There are also expenses such as replacing worn equipment and furnishings, maintaining the facility and administrative overhead.
Elemental’s facilities include Morningstar Residential Care Center and The Gardens by Morningstar (assisted living) in Oswego; Aaron Manor Rehabilitation and Nursing Center in Fairport near Rochester; and Waterville Residential Care Center in Waterville, in Mohawk Valley.
Because of these financial shortfalls, “there’s increased closures, four recently,” Murabito said. “It’s just going to keep going. You don’t hear about it in Downstate.”
One of the reasons that fewer nursing homes matters is that people unable to care for themselves have no place to go if the hospital discharge team cannot find an open spot in a nursing home. For patient safety, they remain in the hospital for days longer than necessary while the hospital personnel search for an available long-term care bed. This results in new hospital admissions lingering in the triage area for hours or even days instead of being admitted to a regular room. It can also mean that people from rural areas are admitted to nursing homes far from home — and friends and family — because that’s the only spot immediately available.
Since long-term care facilities in Upstate receive such dismal reimbursement rates, administrators struggle to provide wages that attract staff. Murabito said that offering modest wages hurts staffing. With lower levels of staffing, “there’s beds open because of staffing penalties,” he said.
Nursing is not a profession that can simply do without sufficient staff.
A statewide poll shows good support for increasing Medicaid funder for long-term care facilities. Empire Report New York’s poll indicates that 64% of voters want to see the increase. Once those polled learn about the hospital discharge issues, that figure rises to 70%.
“We’re asking for the legislators to focus on Upstate,” Murabito said. “There’s a political tug-of-war between Upstate and Downstate. We want $200 million to be provided at a flat rate to get most facilities within $5 to $10 of average per person, per day. Medicaid doesn’t come close. The flat rate is important. Downstate is fighting it tooth and nail. Right now, if there isn’t a flat rate, you’re putting money where it is not needed.”
Increasing Medicaid spending for nursing homes as a percentage would mean that flourishing Downstate facilities would also receive a bump in reimbursement.
The “flat dollar distribution methodology” would offer the same per-day increase to any eligible Upstate facility. This could narrow the gaps between the low and high reimbursement rate homes and help the facilities that need it the most.
“Advocates contend that statewide associations and labor unions have historically avoided confronting Medicaid rate disparities between upstate and Downstate regions, concerned that acknowledging inequity could jeopardize Downstate political support,” Murabito said. “That reluctance, critics argue, has come at the expense of Upstate nursing homes now facing existential risk.”
He hopes that state lawmakers will include the additional funding in the new budget.
“When the legislature looks at it, they say, ‘It’s not bad,’” Murabito said. “Every single year, people have no sense of how people are struggling in long-term care. They’re so out of touch.”
