A 7% increase included in the recently passed Pennsylvania budget for nursing home residents on Medicaid — upping the total to $120 million — will help facilities caring for the elderly but won’t cover the gap between cost of the care and the state’s Medicaid reimbursement, a nursing home official said Friday.

“The Medicaid reimbursement is not sufficient” to cover what had been a 25% deficit between the actual cost of care and the state’s reimbursements from Medicaid, said Marc Feldman, chief financial officer for Transitions Healthcare, a Westminster, Md.-based nursing home chain with a facility in North Huntingdon and five others in Pennsylvania and Maryland.

The money allocated for the Medicaid program will become available Jan. 1.

“This is so important for families. We need to keep funding (Medicaid) to keep the long-term care homes” open, state Sen. President Pro Tempore Kim Ward, R-Hempfield, said during a visit Friday to the Transitions’ North Huntingdon nursing home, where about 120 elderly residents live.

“It’s to help people who really need it,” Ward said.

The state also allocated $5 million more to nursing homes that serve high Medicaid-funded populations, raising the total to $21 million in the 2024-25 budget. The state also receives federal matching funds for that allocation, according to the Pennsylvania Health Care Association, an advocacy organization representing more than 400 long-term care and senior service providers.

The nursing homes also are challenged by staffing mandates and the rising cost of labor, Feldman said. The facilities can’t charge the Medicaid patients — which comprise the majority of nursing home populations — a higher rate to cover additional care costs because the reimbursement rate is set, Feldman said.

As an example of the challenging conditions for long-term care nursing home operators in Pennsylvania, two nursing homes in the past few months have announced planned closures, there have been two bankruptcies and two emergency evacuations of the residents, according to the state health care association. One of those bankruptcies — South Hills Operations LLC — has affected 13 nursing homes in Southwestern Pennsylvania, including ones in North Huntingdon, Monroeville, Murrysville and Cheswick.

Nursing homes in Pennsylvania are operating in the same environment as ones in neighboring states such as Ohio, but those states have reimbursement rates for Medicaid patients ranging from $60 to $100 a day, higher than in Pennsylvania, Feldman said.

“With the higher reimbursement rates, they are to invest in the resources for quality care of the patients that is necessary,” Feldman said.

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