The sunset of Medicare add-on payments last year, looming therapy caps, proposed bad-debt reimbursement changes and tight Medicaid budgets make for a stormy reimbursement forecast for long-term care facilities. Even the Centers for Medicare & Medicaid Services admits that its own policies appear to be taking a toll on the nursing home industry. In "Health Care Industry Market Update: Nursing Facilities," the agency notes that Wall Street has a generally bleak view of the industry, thanks to "uncertainties related to government payment and the rising cost of liability insurance." To see the report, go to . Lesson Learned: While the outlook is generally bleak for long-term care, analysts suggest that companies that diversify into assisted living and continuing care retirement centers may be in a better position to weather the tough times.
While the 2.9 percent Medicare payment increase slated for 2004 is welcome, it may not be enough: "The nursing home industry continues to be in dire straights," says one analyst quoted in the report.