Fact Sheet

The Financial Crisis in Wisconsin's Nursing Facilities

Confronting a fiscal crisis unparalleled in the history of their membership, the state's two largest nursing home associations* jointly engaged the national accounting firm of BDO Seidman, LLP, to conduct an in-depth analysis of the condition of Wisconsin's nursing home facilities. The study found that Wisconsin's nursing facilities are in fact in serious financial condition.

It identified several factors contributing to their distressed status, but concluded "the inadequacies of the Wisconsin Medicaid payment system have, without question, had the greatest impact in the deterioration of the financial and operational conditions of the Wisconsin nursing facilities."

The BDO Seidman** study examined nursing home cost and payment information collected by the Wisconsin Department of Health and Family Services (DHFS) for its Medicaid rate setting database. The data base consists of state-audited facility-specific resident care cost data the state uses in setting 328 nursing home rates for the 1999-2000 payment year, which commenced July 1, 1999. (While there are 417 nursing homes participating in the state's Medicaid program, DHFS had established 1999-2000 Medicaid rates for 328 when the BDO study commenced on May 15, 2000.)

The following are some of the major findings contained in the BDO study:

*The Wisconsin Health Care Association (WHCA) represents 250 for-profit, not-for-profit, and government-operated nursing facilities. The Wisconsin Association of Homes and Services for the Aging (WAHSA) represents 198 not-for-profit and government-operated facilities. (Some facilities belong to both organizations.) For more information, please contact WHCA at 608-257-0125 and WAHSA at 608-255-7060.

**BDO Seidman is a national accounting and business consulting firm with 40 offices around the United States. The author, Joseph Lubarsky, is a CPA and in the firm. He specializes in the redesign and development of state Medicaid payment systems.


Wisconsin Association of Homes and Services for the Aging
204 South Hamilton Street Madison, WI 53703
Telephone: (608)255-7060 FAX:(608)255-7064