Virginia nursing homes are struggling to care for one of the nation's frailest elderly populations while receiving some of the nation's smallest amounts of government support, state auditors reported today.

The danger, said auditors, lawmakers and industry representatives, is that nursing homes stretched thin by staff turnover and skimpy government checks are compromising quality--or soon will be without an infusion of government support.

Staffing problems are especially acute in Northern Virginia, where a raging economy has made it hard to recruit and retain nursing assistants, who make little more than cooks at fast-food restaurants. Turnover in some nursing homes approaches 100 percent a year.

Virginia's Medicaid program pays a daily rate of $78.12 per patient, far below the national average of $98.96 and even further below Maryland's rate of $106.62, said today's report by Virginia's Joint Legislative Audit and Review Commission.

The low rate is more troubling, auditors said, because screening keeps all but the weakest and sickest patients out of Virginia's nursing homes, which have to stretch fewer dollars to provide more extensive services than those in almost any other state.

There are about 27,000 elderly people in 268 nursing homes in Virginia, where more than two-thirds of nursing home residents are needy enough to qualify for Medicaid. But occupancy rates are declining as healthier and wealthier seniors choose assisted-living centers, draining revenue from nursing homes and making them increasingly reliant on Medicaid.

"The Medicaid rate just does not cover the cost of giving good care," said Wayne Kurtz, administrator of the Birmingham Green nursing home in Manassas, a 180-bed facility supported by both Medicaid and several local governments in Northern Virginia. The local governments contribute a daily subsidy of $7.70 per patient to supplement Medicaid payments and improve care.

Birmingham Green generally has one nursing assistant for every 10 patients, even during evening hours, but some facilities have higher ratios.

"Any [funding] increase has to be tied to some quality level and/or commitment to hire staff," said Mark C. Miller, Virginia's long-term care ombudsman.

Gov. James S. Gilmore III (R), whose administration had access to draft copies of the auditors' report two weeks ago, announced last week that his proposed budget would include $20 million to increase reimbursements for long-term care.

Any increase in state money would be matched by an equal increase in federal spending.

Auditors made several recommendations today for revamping the Medicaid payment system to nursing homes. Taken together, they would cost $31.8 million. Dennis Smith, director the state Department of Medical Assistance Services, which administers the Medicaid program, said Virginia nursing homes provide good care.

But Hobart M. Harvey, of the Virginia Health Care Association, which represents most state nursing homes, warned, "It's inevitable that sooner or later there will be a link" between small Medicaid payments and quality of care.

Advocates for the elderly applauded Gilmore's proposal to increase spending on nursing homes, but they said the state should make sure the money goes to beef up staff, not fatten profits. Nearly two-thirds of homes are privately owned.

Last year, the state decided to spend $21.7 million to increase wages for the nursing assistants who do most of the patient care at homes. But wages are still too low--just over $7 an hour statewide, according to some surveys--and staff-to-patient ratios are still too high at nursing homes, say advocates for the elderly.

"They are so understaffed, and the industry will simply not hire more people," said Sarah Greene Burger, executive director of the National Citizens Coalition for Nursing Home Reform.