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Max Medicaid pays for nursing home = $144k/yr?

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rated:
am acquaintance of mine wants to invest in a nursing home in NY.
he said Medicaid pays $12k/month ($144k/year) for nursing home patients minus whatever income that person has (ie: social security).

so basically a nursing home is guaranteed $144k per person since Medicaid  will make up the difference.
That's a lot of profit.

I'm thinking this is waaaaaaaaaaaaaaaay too good to be true else everyone would be doing it?
Where's the flaw?
 

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rated:
I think your friend needs to recheck his numbers.

rated:
Wait til you have to comply with HIPPA. Or Insurance. Or that first family that sues you for negligence.

rated:
12k a month.
Sounds about right.

You have a person on site to administer your drugs and clean them up 3 to 5 times a day.
Medicaid only pays for a 'semi-private' room, so you will have a roomie.

rated:
forbin4040 said:   12k a month.

Medicaid only pays for a 'semi-private' room, so you will have a roomie.

  
from OP's perspective =$24k/room  maybe more ??
 

rated:
yurgreat said:   am acquaintance of mine wants to invest in a nursing home in NY.
he said Medicaid pays $12k/month ($144k/year) for nursing home patients minus whatever income that person has (ie: social security).

so basically a nursing home is guaranteed $144k per person since Medicaid  will make up the difference.
That's a lot of profit.

I'm thinking this is waaaaaaaaaaaaaaaay too good to be true else everyone would be doing it?
Where's the flaw?

The flaw is in your friends estimate of Medicaid payments.  Obviously, payments vary by state and New York would have one of the highest reimbursement rates.  The $12,000 is probably for BOTH patients in a semi-private room and not per patient.
Medicaid reimbursement is based on facility cost, though that leaves some wiggle room in "cost".  In most cases, Medicaid patients cover the costs of operating the facility and private pay patients provide the profit.    

rated:
The nursing home business is very complex - Medicaid is only part of the puzzle. Sounds like not nearly enough reseach has been done here.

rated:
If he is "investing" then he should have access to the balance sheets. If someone is selling part of their interest then they aren't making enough money.

rated:
https://www.health.ny.gov/facilities/nursing/estimated_average_rates.htm

Yes it is that expensive. NY is pricey.


Keep in mind most of that money is for medical staff I'd assume. High rents in NYC Metro and state regulations probably make it more expensive.

rated:
jerosen said:   https://www.health.ny.gov/facilities/nursing/estimated_average_r...

Yes it is that expensive. NY is pricey.


Keep in mind most of that money is for medical staff I'd assume. High rents in NYC Metro and state regulations probably make it more expensive.

  These are private rates. Medicaid rates are different, see:

https://www.health.ny.gov/facilities/long_term_care/reimbursemen...

rated:
^ good catch. Still lots in the 100K+ range in NY & NYC especially.

rated:
jerosen said:   ^ good catch. Still lots in the 100K+ range in NY & NYC especially.
  
And $700 a day is more than $144k a year.

rated:
taxmantoo said:   jerosen said:   ^ good catch. Still lots in the 100K+ range in NY & NYC especially.
  
And $700 a day is more than $144k a year.



The ones with very high rates are labeled 'vent' which seems to imply some sort of specialized care.

rated:
jerosen said:   
taxmantoo said:   
jerosen said:   ^ good catch. Still lots in the 100K+ range in NY & NYC especially.
  
And $700 a day is more than $144k a year.



The ones with very high rates are labeled 'vent' which seems to imply some sort of specialized care.

  
It's old people who fart a lot.

rated:
Roaringone said:   Medicaid rates:
https://www.health.ny.gov/facilities/long_term_care/reimbursement/nhr/2016/nursing_home_rates_jan_2016.htm 

  thx!

KINGS 7001318N NF Schulman and Schachne Institute for Nursing and Rehabilitat $285.80/day = $104k/yr
KINGS 7001318N AIDES Schulman and Schachne Institute for Nursing and Rehabilitat $502.85
KINGS 7001318N VENT Schulman and Schachne Institute for Nursing and Rehabilitat $673.16 = $246k/yr

nf= nursing facility
vent= Ventilator/Respiratory Care

but what is Aides?
dedicated Nurse aide?

and wow, Medicaid pays $246k/yr for a Ventilator bed in Brookyln, NY?!

rated:
Ventilator requires you to hire a respiratory tech around the clock. Also, you need to be aware that most patients will not be long term residents. You need to be very careful about who you agree to take on, since there are many patients with psychiatric and substance abuse issues. This all means that there is profit to be made, but it's hard work.

rated:
jerosen said:   https://www.health.ny.gov/facilities/nursing/estimated_average_rates.htm

Yes it is that expensive. NY is pricey.


Keep in mind most of that money is for medical staff I'd assume. High rents in NYC Metro and state regulations probably make it more expensive.

  
Wait you mean it isn't easy to find qualified medical staff for cheap that also wants to clean up other people's shit and change them?

rated:
Don't nursing homes have similar returns on equity as restaurants? High single digits? And that includes private ones that can charge more.

rated:
Roaringone said:   
jerosen said:   https://www.health.ny.gov/facilities/nursing/estimated_average_rates.htm 

Yes it is that expensive. NY is pricey.


Keep in mind most of that money is for medical staff I'd assume. High rents in NYC Metro and state regulations probably make it more expensive.

  These are private rates. Medicaid rates are different, see:

https://www.health.ny.gov/facilities/long_term_care/reimbursement/nhr/2016/nursing_home_rates_jan_2016.htm

  

Many states rates are much lower than that.  If you think you are going to get rich in nursing homes just get the idea out of your head.  There are a few big players and they are not looking for competition.

rated:
TravelerMSY said:   Don't nursing homes have similar returns on equity as restaurants? High single digits? And that includes private ones that can charge more.
 

  in ny?
im shocked since you're basically guaranteed $144k/yr for each person thx to Medicaid making up the difference.

or are you saying the fudge factor in 'base costs' that forms the basis of Medicaid's reimbursement can only be stretched to the high single digits?

rated:
yurgreat said:   TravelerMSY said:   Don't nursing homes have similar returns on equity as restaurants? High single digits? And that includes private ones that can charge more.
 

  in ny?
im shocked since you're basically guaranteed $144k/yr for each person thx to Medicaid making up the difference.

or are you saying the fudge factor in 'base costs' that forms the basis of Medicaid's reimbursement can only be stretched to the high single digits?



You need to look at all the costs involved.

Can you tell us what they are?

Assuming the "fudge factor" will ensure that you net fat profit without understanding the actual costs is a recipe for bankruptcy.

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