Some elderly patients in hospitals have complex medical problems, but no longer need hospital care. But following cutbacks in Medicare payments, nursing homes are increasingly rejecting these high-cost patients. What are hospitals to do and what is to become of these patients?

• Hospitals are having to keep some patients for months after they should have been discharged because nursing homes won't accept them.

• While Medicare reimburses nursing homes for up to 100 days of care after a patient's hospital stay, administrators say that reduced federal reimbursements don't cover the costs of care for patients with complicated needs.

• Nursing-home administrators contend that drug costs alone for some patients exceed Medicare reimbursements.

• Between 1993 and 1996, the average stay for a Medicare patient in a hospital declined from 8.1 to 6.6 days -- but the American Hospital Association warns that figure will start rising.

Officials of the nursing home industry charge that Medicare is drastically underpaying for such expensive services as respiratory therapy, wound care, prescription drugs and artificial limbs. A number of health-care groups are pressing the agency to increase payments immediately for high-cost patients. Medicare officials say they are expediting research to be able to adjust payment rates as appropriate.

Source: Laurie McGinley, "As Nursing Homes Say 'No,' Hospitals Feel Pain," Wall Street Journal, May 26, 1999.