Nursing homes at odds on apportioning of spending hike (7/22/02 AP Newswires) SALT LAKE CITY (AP) - Two groups of nursing-home operators are at odds over how a 12. 1 percent, $15 million boost in their reimbursement from Medicaid should be distributed. The Utah Health Care Association, with 87 nursing home members statewide, wants half of that increase to be distributed across the board and the rest to address disparities in labor and property cost differentials between urban and rural facilities. "What concerns me is there should be incentives for re-capitalizing our facilities. Plus there are differences in our labor costs," said the association's director, Joan Gallegos. The state's nursing homes are reimbursed for Medicaid patients mostly on a flat-rate basis, with a slight differential for labor and property costs. A coalition of nursing home owners opposed to the health care association's plan argues putting a large share of the money toward property differential would be a return to the cost-based Medicaid payment methods abandoned nearly two decades ago. "It would basically reward the larger, inefficient providers," said Bob Breinholt, owner of Aspen Care Center in Ogden and co-owner of another facility in Orem. "Returning to the cost-based system that was used in the 1980s would be a step backward. " Faye Lincoln of Heritage Management said the larger nursing homes generally have more Medicare patients and Medicare patients are reimbursed at a rate two to three times higher than that of Medicaid. She contends that although Heritage Management, owner of 11 nursing homes in Utah, would come out ahead using a cost-based system, that the method would siphon money from patient care and be used instead to support expensive operations. "Cost-based systems tend to drive costs up in the long run," Lincoln said. Both side agree that the raise was desperately needed. With Medicaid accounting for about 63 percent of a nursing home's revenue, the industry saw the funding for the indigent shrinking over the years, and some providers were forced to shut down. State Sen. Dave Steele, R-West Point, said lawmakers recognized the dire situation of nursing homes when it approved the increase in reimbursement. He said he favors an across-the-board increase coupled with some money set aside for regional cost differences.