Why It Matters
Medicaid and Medicare play outsized roles in funding and access to nursing home care in the United States. As of July, 14,693 long-term care facilities with more than 1.5 million certified beds participated in Medicare and/or Medicaid, with the vast majority certified to participate in both programs.
As of July 2025, Medicaid was the primary payer for 63 percent of nursing home residents, while Medicare covered 14 percent and private or other sources accounted for 23 percent. Total U.S. spending on nursing home services reached $229.7 billion in 2024, with Medicare and Medicaid combined accounting for $136 billion, or 59.2 percent of that total.
The Big Picture
Long-term care facilities provide both short-term skilled nursing care for recuperation after an acute illness and continuous extended care with around-the-clock supervision and assistance with personal care activities. Under traditional Medicare Part A, skilled nursing facility services are paid through a prospective payment system adjusted for geographic differences in labor costs and resident case mix.
To qualify for Medicare coverage, beneficiaries generally must have an inpatient hospital stay of at least three consecutive calendar days, excluding the discharge day, and may receive up to 100 days of covered skilled nursing facility care per benefit period. Traditional Medicare beneficiaries face daily coinsurance of $217 for days 21 through 100 of a covered stay.
State Medicaid programs are required to cover nursing facility services for beneficiaries age 21 and older, using functional criteria, clinical criteria or both to determine eligibility. Nursing homes participating in Medicare or Medicaid must meet federal Requirements of Participation covering resident rights, quality of care, staffing and services. State survey agencies conduct certification surveys and periodic unannounced inspections, while federal law authorizes enforcement actions, including civil monetary penalties, for deficiencies.
The Bottom Line
The Special Focus Facility program targets nursing homes with a history of poor inspection performance for additional oversight. CMS's August list identified facilities participating in the program as well as additional candidates for designation.
Other residential settings, including assisted living facilities, generally are considered community-based rather than institutional settings and are not subject to the federal nursing home Requirements of Participation. Some residential settings may provide Medicare skilled nursing facility or Medicaid nursing facility care as part of a broader continuum of services, and that institutional care must meet the applicable federal Requirements of Participation.
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