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Financial analysis and considerations for transforming long-term care with single-resident rooms

May 6, 2021 In The News 15 min read
Authors:
Betsy Rust Robert Long

Economic considerations are an important factor in converting to single-resident rooms in nursing homes. Betsy Rust and Robert Long estimate new costs and summarize other transition considerations via Health Management Associates

Healthcare worker standing behind wheelchair for elderly patient.Michigan has 430 licensed skilled nursing facilities (SNFs) with a total bed capacity of 45,621. SNFs in Michigan provide short-term rehabilitation and recovery services as well as long-term custodial and chronic care. Ninety-five percent of facilities offer some single-resident rooms, but 9% of available beds exist as three- or four-bed wards. Fifty-five facilities reported having at least one four-person room.

There is one licensure category for skilled nursing in Michigan, but there are two designations of SNFs for reimbursement purposes. Class I facilities are freestanding. Class III facilities may be freestanding and owned by a county government or may be physically attached to a hospital and considered a hospital long-term care unit (HLTCU). Medicaid payment limits for the two classes are established separately by aggregating cost and utilization data. Class I and Class III facilities also have different Medicaid reimbursement mechanisms for capital costs.

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