Federal Nursing Home Administrator Practice Exam

Which source typically provides the least revenue for a nursing home?

1. Medicare

2. Private pay

3. Insurance

4. Government grants

The correct answer is: Insurance

The correct choice is the source that typically provides the least revenue for a nursing home. Insurance, as a payment source, can vary significantly depending on the type of plan, coverage limits, and negotiation agreements with the nursing home. Insurance companies may impose strict guidelines on the types of services covered, leading to limitations on reimbursement compared to other sources. In contrast, Medicare usually offers more reliable and comprehensive coverage for eligible residents, particularly for skilled nursing care, while private pay can provide a stable and often higher income as residents pay out of pocket. Government grants, while potentially limited in scope, can also provide specific funding that may enhance a nursing home's financial situation, especially for programs that promote care quality or improvements in facilities. Given these factors, insurance often results in lower and less predictable revenue streams, leading to it being the least beneficial source of revenue for nursing homes compared to the more substantial and stable income provided by Medicare, private pay, and government grants.