Medicaid Payment Rates, Case-Mix Reimbursement, and Nursing Home Staffing—1996-2004

Maintaining continuity of care for nursing home residents: effect of states' Medicaid bed-hold policies and reimbursement rates

OBJECTIVE

Recent public concern in response to states' intended repeal of Medicaid bed-hold policies and report of their association with higher hospitalization rates prompts examination of these policies in ensuring continuity of care within the broader context of Medicaid policies.

DATA SOURCES/STUDY DESIGN

Minimum Data Set assessments of long-stay nursing home residents in April-June 2000 linked to Medicare claims enabled tracking residents' hospitalizations during the ensuing 5 months and determining hospital discharge destination. Multinomial multilevel models estimated the effect of state policies on discharge destination controlling for resident, hospitalization, nursing home, and market characteristics.

RESULTS

Among 77,955 hospitalizations, 5,797 (7.4 percent) were not discharged back to the baseline nursing home. Bed-hold policies were associated with lower odds of transfer to another nursing home (AOR=0.55, 95 percent CI 0.52-0.58) and higher odds of hospitalization (AOR=1.36), translating to 9.5 fewer nursing home transfers and 77.9 more hospitalizations per 1,000 residents annually, and costing Medicaid programs about $201,311. Higher Medicaid reimbursement rates were associated with lower odds of transfer.

CONCLUSIONS

Bed-hold policies were associated with greater continuity of NH care; however, their high cost compared with their small impact on transfer but large impact on increased hospitalizations suggests that they may not be effective.

Maintaining continuity of care for nursing home residents: effect of states' Medicaid bed-hold policies and reimbursement rates

OBJECTIVE

Recent public concern in response to states' intended repeal of Medicaid bed-hold policies and report of their association with higher hospitalization rates prompts examination of these policies in ensuring continuity of care within the broader context of Medicaid policies.

DATA SOURCES/STUDY DESIGN

Minimum Data Set assessments of long-stay nursing home residents in April-June 2000 linked to Medicare claims enabled tracking residents' hospitalizations during the ensuing 5 months and determining hospital discharge destination. Multinomial multilevel models estimated the effect of state policies on discharge destination controlling for resident, hospitalization, nursing home, and market characteristics.

RESULTS

Among 77,955 hospitalizations, 5,797 (7.4 percent) were not discharged back to the baseline nursing home. Bed-hold policies were associated with lower odds of transfer to another nursing home (AOR=0.55, 95 percent CI 0.52-0.58) and higher odds of hospitalization (AOR=1.36), translating to 9.5 fewer nursing home transfers and 77.9 more hospitalizations per 1,000 residents annually, and costing Medicaid programs about $201,311. Higher Medicaid reimbursement rates were associated with lower odds of transfer.

CONCLUSIONS

Bed-hold policies were associated with greater continuity of NH care; however, their high cost compared with their small impact on transfer but large impact on increased hospitalizations suggests that they may not be effective.

Restructuring in response to case mix reimbursement in nursing homes: a contingency approach

BACKGROUND

Resident-based case mix reimbursement has become the dominant mechanism for publicly funded nursing home care. In 1998 skilled nursing facility reimbursement changed from cost-based to case mix adjusted payments under the Medicare Prospective Payment System for the costs of all skilled nursing facility care provided to Medicare recipients. In addition, as of 2004, 35 state Medicaid programs had implemented some form of case mix reimbursement.

PURPOSE

The purpose of the study is to determine if the implementation of Medicare and Medicaid case mix reimbursement increased the administrative burden on nursing homes, as evidenced by increased levels of nurses in administrative functions.

METHODOLOGY/APPROACH

The primary data for this study come from the Centers for Medicare and Medicaid Services Online Survey Certification and Reporting database from 1997 through 2004, a national nursing home database containing aggregated facility-level information, including staffing, organizational characteristics and resident conditions, on all Medicare/Medicaid certified nursing facilities in the country. We conducted multivariate regression analyses using a facility fixed-effects model to examine the effects of the implementation of Medicaid case mix reimbursement and Medicare Prospective Payment System on changes in the level of total administrative nurse staffing in nursing homes.

FINDINGS

Both Medicaid case mix reimbursement and Medicare Prospective Payment System increased the level of administrative nurse staffing, on average by 5.5% and 4.0% respectively. However, lack of evidence for a substitution effect suggests that any decline in direct care staffing after the introduction of case mix reimbursement is not attributable to a shift from clinical nursing resources to administrative functions.

PRACTICE IMPLICATIONS

Our findings indicate that the administrative burden posed by case mix reimbursement has resource implications for all freestanding facilities. At the margin, the increased administrative burden imposed by case mix may become a factor influencing a range of decisions, including resident admission and staff hiring.