DHS Announces Medicaid Nursing Home Rate Increase to Support Health Care Workforce

The Wisconsin Department of Health Services (DHS) announces that Medicaid cost coverage for nursing homes will increase from 77% for fiscal year 2022 to 91% for fiscal year 2023. The increase implements one of the key recommendations from Governor’s Task Force on Caregiving, tying a significant amount of the increase to direct care nursing and supporting the health care workforce in both wages and benefits.

“The people who work in and lead Wisconsin’s nursing homes are critical to ensuring quality care for residents across the state of Wisconsin,” said Karen Timberlake, DHS Secretary-designee. “Our new rate setting model allows us to prioritize funding for direct care nursing and support increased wages for health care workers to ensure continuing high-quality care.”

The rate increase fulfills Gov. Evers commitment announced earlier this year to increase rates for nursing homes and hospitals. From July 1, 2019 through June 30, 2023, Wisconsin is investing more than $500 million in payments and incentives to nursing homes, and more than $275 million in payments and incentives to hospitals. Wisconsin projects that the demand for long-term care services will rise faster than the workforce will grow in the coming years. According to the Governor's Taskforce on Caregiving, the state's population age 65 and older is expected to grow by 72% from 2015-2040. This rate of growth is six times higher than the overall increase in Wisconsin population, projected at 12% for the same period.

“Building on the long-term care funding provisions contained in the 2021-2023 state budget, DHS has implemented bold steps to further invest in our state’s fragile nursing home system and has done so in a way that targets dollars where they are most desperately needed,” said John Sauer, LeadingAge Wisconsin President and CEO. “Our mission-driven providers are deeply appreciative of these efforts which appropriately allocate critically needed dollars for caregivers and other frontline support staff who are essential in meeting the needs of our skilled care residents. Those who live and work in our state’s long-term care settings will be greatly assisted by the nursing home funding system advanced by DHS.”

“The Wisconsin Health Care Association is grateful to DHS for its work to implement critical funding increases for Wisconsin’s skilled nursing facilities,” said Rick Abrams, CEO of the Wisconsin Health Care Association. “It has been our priority to ensure a fair, equitable distribution of the historic funding increases included by the 2021-23 state budget. Rate increases in the support services and direct care cost centers will help Wisconsin nursing home providers ensure quality care while also addressing ongoing financial challenges, including increased operational costs due to COVID-19 and increased inflation. We commend DHS for its collaborative approach to the nursing home rate setting process, and for implementing a rate plan that considers the diverse needs of providers across the state.”