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Volume 12 Number 110 News: Medicaid ALBANY, N.Y.—An estimated $85 billion to $105 billion in Medicaid funding went to nonprofit health care providers in 2004, according to a study released June 6 by the Nelson A. Rockefeller Institute of Government. The study found that $42 billion in Medicaid funding went to hospitals, $11 billion to nursing homes, and between $17.5 billion and $20.9 billion went to community and home care providers. An estimated $5.5 billion to $16.9 billion went to mental health providers, while between $9.4 billion and $13.8 billion went to managed care plans, according to the study. The study said it is difficult to determine how much Medicaid funding goes to nonprofits because there is no single database to track such funding. "Much has been discussed in the literature about the role of nonprofits in providing health care--whether their practices should entitle them to tax-exempt status, how cuts in funding cause cost-shifting within nonprofits, or how tax status might be related to quality of care," the study said. "Aside from estimates for the purpose of advocacy, there has been very little research on the degree to which nonprofit health care providers rely on Medicaid funding, how that reliance is changing, or what the organizational effects might be." Funding's Impact on Activities The study said Medicaid funding has had a significant impact on the "missions, management, and budgeting tactics" of nonprofits, particularly social service providers. "It has required providers not specializing in medical care to employ staff with medical credentials to continue receiving Medicaid reimbursement," the study said. "Hiring medically qualified staff has, in turn, increased the capacity of nonprofit organizations. "Receiving Medicaid funding has also made nonprofits' funding bases volatile--especially for those organizations that provide optional services," according to the study. The study said spending has increased by some 300 percent over the past 10 years on small, community-based health care providers that provide services such as hospice care, case management, and home care. It said such small providers receive a small portion of total Medicaid funding, but that funding makes up a large part of their budgets. They are, therefore, more susceptible to changes in Medicaid policies than other providers, according to the study. The Rockefeller Institute is the public policy research arm of the State University of New York. The study was prepared for the Aspen Institute, a Washington-based think tank. The report is available.
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