Services provided in nursing homes include services of nurses, nursing aides and assistants; physical, occupational and speech therapists; social workers and recreational assistants; and room and board. Most care in nursing facilities is provided by certified nursing assistants, not by skilled personnel. In 2004, there were, on average, 40 certified nursing assistants per 100 resident beds. The number of registered nurses and licensed practical nurses were significantly lower at 7 per 100 resident beds and 13 per 100 resident beds, respectively.

Nursing facilities that participate in the Medicare and Medicaid programs are subject to federal requirements regarding staffing and quality of care for residents (42 CFR Part 483). In 2004, 98.5% of the 16,100 nursing facilities nationwide were certified to participate in Medicare, Medicaid, or both.

Medicare covers nursing home services for beneficiaries who require skilled nursing care and/or rehabilitation services following a hospitalization of at least three consecutive days. The program does not cover nursing care if only custodial care is needed -- for example, when a person needs assistance with bathing, walking, or transferring from a bed to a chair. To be eligible for Medicare-covered skilled nursing facility (SNF) care, a physician must certify that the beneficiary needs daily skilled nursing care or other skilled rehabilitation services that are related to the hospitalization, and that these services, as a practical matter, can be provided only on an inpatient basis. For example, a beneficiary released from the hospital after a stroke and in need of physical therapy, or a beneficiary in need of skilled nursing care for wound treatment following a surgical procedure, might be eligible for Medicare-covered SNF care.

SNF services may be offered in a free-standing or hospital-based facility. A freestanding facility is generally part of a nursing home that covers Medicare SNF services as well as long-term care services for people who pay out-of-pocket, through Medicaid, and/or through a long-term care insurance policy. Generally, Medicare SNF patients make up just a small portion of the total resident population of a free-standing nursing home.

Medicaid also covers nursing home care for certain persons who require custodial care, meet a state's means-tested income and asset tests, and require the level-of-care offered in a nursing home. Nursing home residents have physical or cognitive impairments and require 24-hour care.

Many patients who live in nursing homes often begin paying out-of-pocket. Some deplete their resources on the often high cost of care. If eligible, Medicaid will cover continued stays in nursing home for these individuals.