The government has announced it will review the amount of money nursing homes are paid to look after residents.
Nursing homes are currently paid £112 for every resident who receives care from a registered nurse.
Clinical commissioning groups make these payments out of their budgets.
The review will consider whether the current rate paid reflects the costs of providing care and if it supports high quality out of hospital care.
In 2013-14, approximately 85,000 people received NHS funded nursing home care.
The Department of Health expects to complete the review within this financial year.
Workforce shortages in nursing homes and a lack of provision in some areas of the country has been an ongoing concern for trusts as they struggle with increased admissions in emergency departments and delayed transfers of care.
A Department of Health spokesman said: “Care in nursing homes is critical for supporting people outside of hospitals.
“This review will help ensure a funding mechanism that is fit for purpose and supports a high-quality and sustainable nursing care service,” she said.
Care England said it was delighted that the government had announced that it would carry out a review on nursing home payments.
Professor Martin Green, chief executive of Care England, said: “Care England will continue to liaise with the Department of Health as to the manner of the review and liaise with others in the nursing home sector on this extremely important issue.”