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Both SNFs and ICFs are subject to federal regulation under the Medicare Requirements for Long Term Care Facilities, Code of Federal Regulations Title 42, Chapter IV, Part 483. These regulations provide guidelines for operating standards for nursing homes which seek reimbursement through Medicare and Medicaid. The number of beds allocated for SNFs and ICFs is limited and regulated in each state. In some states this may be by certificate of need committees in the same way that hospital beds are regulated or by other regulatory mechanisms.
As of 1995, there were approximately 16,000 nursing homes in the United States. The majority of these nursing homes are small (under 100 beds) and are run as-for-profit institutions. There are between 1.5 and 2 million nursing home beds available in the United States. This is almost double the number of acute care hospital beds. The occupancy rate for nursing home beds is high, typically above 85 percent. As the population in the United States ages, tremendous growth will be seen in the nursing home population. The number of nursing home beds is expected to more than double to greater than 5 million over the next 30 years. At any given point in time 5 percent of the population over the age of 65 resides in a nursing home. The nursing home population is, however, not static. Discharges to home and the acute care hospital, as well as death, cause a continuous flux in the population. Due to this high turnover rate, the lifetime risk of nursing home placement is underestimated. Some studies have shown that the lifetime risk of a nursing home admission may be as high as 50 percent for those over the age of 65. A number of risk factors for nursing home placement have been identified including: advanced age, dementia, cerebrovascular accident, urinary incontinence, falls and fall risk, and lack of social support. Nursing home residents can roughly be divided into two groups based on length of stay: those that reside longer than 6 months and those who stay less than 6 months. The median length of time spent in nursing homes in the United States is approximately 6 months; however, about 21 percent stay more than 5 years. Individuals who stay in the nursing home for relatively short lengths of time include those who are admitted with terminal disease and those who need rehabilitation or subacute (skilled nursing) care. Residents who stay more than 6 months can be broadly classified into three groups: those who are primarily cognitively impaired; those who are primarily physically impaired; and those who have both significant cognitive and physical impairment. Nursing home care is paid for largely through two federal entitlement programs, Medicare and Medicaid. Medicare covers payments to nursing homes for the first 100 days of care after a hospital admission. After the first 100 days, the resident is then required to pay for services out-of-pocket. This period is referred to as the "spend down time." During this time, the life time savings of the resident is spent to pay for nursing home care. After a period of time, the resident’s resources are exhausted, rendering him/her indigent and eligible for Medicaid. In terms of absolute dollars, the vast majority of nursing home care is paid for through the Medicaid program. Long term care, in fact, accounts for the largest percentage of Medicaid expenditures. Optometric services within nursing homes are covered under Medicare and Medicaid programs as they are for in-office services (See XIII. Coding and Billing).
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