How Does Medicaid Reimbursement Impact Nursing Home Quality? The Effects of Small Anticipatory Changes

Abstract

Objective: In 2006, Ohio changed its Medicaid reimbursement methodology for nursing homes (NHs) to promote more efficient staffing levels. This study examines the impacts of this policy change on quality.

Research design and subjects: Ohio NHs were categorized based on their anticipated change in reimbursement under a new reimbursement system initiated in 2006. Linear regressions were utilized to determine how quality changed from 2006 to 2010 relative to a group of NHs that were not anticipated to experience any significant change in reimbursement. We examine resident outcomes constructed from the Minimum Data Set, deficiency citations, staffing levels, and satisfaction scores for residents and families as measures of quality.

Principal findings: Nursing homes in the group receiving increased reimbursement showed an increase in nursing and nursing aide staffing levels. NHs in the group receiving a reduction in reimbursement did lower staffing levels. None of the nonstaffing quality outcomes were impacted by changes in Medicaid reimbursement.

Conclusion: Increased Medicaid reimbursement was found to increase staffing levels, but it had a limited effect, at least in the short run, on an array of nonstaffing quality outcomes.

Keywords: Medicaid reimbursement; linkage of payment and quality; nursing homes; quality of care.