Minnesota Office of the Legisl Ative Auditor

As our nation’s population ages, an increasing number of Americans will need some type of long-term care services. While more attention is being focused on the development of alternatives to nursing home care, most public and private spending still pays for institutional care in nursing homes. Minnesota spent over $800 million in Medicaid funds on nursing homes in 1995; the federal government financed 54 percent of this spending. According to federal data, Minnesota’s average Medicaid nursing home reimbursement rate of $92.24 per day in 1994 ranked 13th among the states and was higher than any surrounding state.1 For these reasons, policy makers have shown growing concern about the cost of nursing home services.