Concord, New Hampshire — Nursing home operators across New Hampshire have been losing Medicaid reimbursement money they didn’t know they were owed — and the culprit is a payment formula that no longer reflects reality.
The problem stems from a mismatch between two methodologies. The state’s Medicaid reimbursement rate is calculated using a case mix index based on patient complexity measured at a specific point in time. But that figure gets compared against a broader patient population that includes private pay and Medicare residents — not just Medicaid patients. Because earlier data showed higher patient complexity than more recent Medicaid-specific numbers, many facilities are receiving negative adjustments of up to 9.11%.
In plain terms: nursing homes are being paid less because of old data that no longer matches who’s actually in their beds.
“This is a disconnect that needs to be addressed,” Brendan Williams, president and CEO of the New Hampshire Health Care Association, wrote in a recent editorial. He called it a broken system putting facilities at risk.
A Legislative Fix Takes Shape
Legislators have responded. A state bill aimed at creating a working group to study Medicaid reimbursement in New Hampshire — and recommend structural changes — passed the Senate last month and is now moving through the House.
The proposal mirrors the model used at the federal level by the Medicare Payment Advisory Commission, known as MedPAC. If enacted, it would establish a permanent mechanism to evaluate reimbursement rates and flag mismatches before they compound into years-long payment shortfalls.
The timing matters. New Hampshire’s nursing homes, like those across the country, are still working through the financial pressure of rising labor costs, workforce shortages, and post-pandemic occupancy challenges. A methodology error cutting payments by nearly a tenth isn’t an abstraction — it shows up directly in operating budgets.
Operators in similar situations have felt the squeeze elsewhere, too. Pennsylvania nursing homes have pointed to their own reimbursement formula as a driver of closures, with some facilities saying the math simply doesn’t add up when Medicaid rates don’t keep pace with actual costs.
What Comes Next
The bill doesn’t automatically fix the payment shortfall. It creates the process to study and recommend a fix — which means full relief, if it comes, could still be months or years away depending on how quickly the working group moves and whether the legislature acts on its recommendations.
That’s cold comfort for facilities that have already absorbed the losses. But industry advocates say having a formal review mechanism in place is a necessary first step, and that without it, problems like this one tend to persist long after they’re identified.
Whether New Hampshire’s approach — modeling a state-level version of MedPAC — gains traction elsewhere remains to be seen. Several states are grappling with similar Medicaid methodology questions as federal budget pressure filters down and reimbursement accuracy becomes harder to ignore.
