The devil's in the details: trading policy goals for complexity in medicaid nursing home reimbursement

Incentive Design and Quality Improvements: Evidence from State Medicaid Nursing Home Pay-for-Performance Programs

Pay-for-performance (P4P) programs have become a popular policy tool aimed at improving health care quality. We analyze how incentive design affects quality improvements in the nursing home setting, where several state Medicaid agencies have implemented P4P programs that vary in incentive structure. Using the Minimum Data Set and the Online Survey, Certification, and Reporting data from 2001 to 2009, we examine how the weights put on various performance measures that are tied to P4P bonuses, such as clinical outcomes, inspection deficiencies, and staffing levels, affect improvements in those measures. We find larger weights on clinical outcomes often lead to larger improvements, but small weights can lead to no improvement or worsening of some clinical outcomes. We find a qualifier for P4P eligibility based on having few or no severe inspection deficiencies is more effective at decreasing inspection deficiencies than using weights, suggesting simple rules for participation may incent larger improvement.

The Need for Higher Minimum Staffing Standards in U.S. Nursing Homes

Many U.S. nursing homes have serious quality problems, in part, because of inadequate levels of nurse staffing. This commentary focuses on two issues. First, there is a need for higher minimum nurse staffing standards for U.S. nursing homes based on multiple research studies showing a positive relationship between nursing home quality and staffing and the benefits of implementing higher minimum staffing standards. Studies have identified the minimum staffing levels necessary to provide care consistent with the federal regulations, but many U.S. facilities have dangerously low staffing. Second, the barriers to staffing reform are discussed. These include economic concerns about costs and a focus on financial incentives. The enforcement of existing staffing standards has been weak, and strong nursing home industry political opposition has limited efforts to establish higher standards. Researchers should study the ways to improve staffing standards and new payment, regulatory, and political strategies to improve nursing home staffing and quality.

The Need for Higher Minimum Staffing Standards in U.S. Nursing Homes

Many U.S. nursing homes have serious quality problems, in part, because of inadequate levels of nurse staffing. This commentary focuses on two issues. First, there is a need for higher minimum nurse staffing standards for U.S. nursing homes based on multiple research studies showing a positive relationship between nursing home quality and staffing and the benefits of implementing higher minimum staffing standards. Studies have identified the minimum staffing levels necessary to provide care consistent with the federal regulations, but many U.S. facilities have dangerously low staffing. Second, the barriers to staffing reform are discussed. These include economic concerns about costs and a focus on financial incentives. The enforcement of existing staffing standards has been weak, and strong nursing home industry political opposition has limited efforts to establish higher standards. Researchers should study the ways to improve staffing standards and new payment, regulatory, and political strategies to improve nursing home staffing and quality.

The role of the media in agenda setting: the case of long-term care rebalancing

This study investigates the role of print media in state policy agendas in four states-Connecticut, Minnesota, Oregon, and Utah-in rebalancing long-term care away from institutions toward home- and community-based (HCBS) services. Ordinary least squares regression is used to model states' policy agendas, as measured by the proportion of Medicaid long-term care spending on HCBS expenditures and number of rebalancing bills proposed, from 1999 to 2008. Results reveal a relationship between states' rebalancing agendas and the extent of media coverage, and state economic, political, and programmatic characteristics. Findings suggest that media coverage reflects broader shifts in state-level attitudes toward rebalancing.

Medicaid capital reimbursement policy and environmental artifacts of nursing home culture change

PURPOSE OF THE STUDY

To examine how Medicaid capital reimbursement policy is associated with nursing homes (NHs) having high proportions of private rooms and small households.

DESIGN AND METHODS

Through a 2009/2010 NH national survey, we identified NHs having small households and high proportions of private rooms (≥76%). A survey of state Medicaid officials and policy document review provided 2009 policy data. Facility- and county-level covariates were from Online Survey, Certification and Reporting, the Area Resource File, and aggregated resident assessment data (minimum data set). The policy of interest was the presence of traditional versus fair rental capital reimbursement policy. Average Medicaid per diem rates and the presence of NH pay-for-performance (p4p) reimbursement were also examined. A total of 1,665 NHs in 40 states were included. Multivariate logistic regression analyses (with clustering on states) were used.

RESULTS

In multivariate models, Medicaid capital reimbursement policy was not significantly associated with either outcome. However, there was a significantly greater likelihood of NHs having many private rooms when states had higher Medicaid rates (per $10 increment; adjusted odds ratio [AOR] 1.13; 95% CI 1.049, 1.228), and in states with versus without p4p (AOR 1.78; 95% CI 1.045, 3.036). Also, in states with p4p NHs had a greater likelihood of having small households (AOR 1.78; 95% CI 1.045, 3.0636).

IMPLICATIONS

Higher NH Medicaid rates and reimbursement incentives may contribute to a higher presence of 2 important environmental artifacts of culture change-an abundance of private rooms and small households. However, longitudinal research examining policy change is needed to establish the cause and effect of the associations observed.

Improving direct-care compensation in nursing homes: Medicaid wage pass-through adoption, 1999-2004

Because states play such a prominent role in the U.S. health care system, they have long grappled with how to best control health care costs while maintaining high quality of care. There are many policy tools available to address efficiency and quality concerns--from pure state regulation to market-oriented competition designs. Given public discourse and official party platforms, one would assume that states controlled by Democrats would be more likely to adopt regulatory reforms. This study examines whether party control, as well as other economic and political factors, is associated with adopting wage pass-through (WPT) policies, which direct a portion of Medicaid reimbursement or its increase toward nursing home staff in an effort to reduce staff turnover, thereby increasing efficiency and the quality of care provided. Contrary to expectations, results indicate that states with Republican governors were against WPT adoption only when for-profit industry pressure increased; otherwise, they were more likely to favor adoption than their Democratic counterparts. This suggests a more complex relationship between partisanship and state-level policy adoption than is typically assumed. Results also indicate that state officials reacted predictably to prevailing political and economic conditions affecting state fiscal-year decisions but required sufficient governing capacity to successfully integrate WPTs into existing reimbursement system arrangements. This suggests that WPTs represent a hybrid between comprehensive and incremental policy change.

The role of care home fees in the public costs and distributional effects of potential reforms to care home funding for older people in England

In England, Local Authorities (LAs) contribute to the care home fees of two-thirds of care home residents aged 65+ who pass a means test. LAs typically pay fees below those faced by residents excluded from state support. Most proposals for reform of the means test would increase the proportion of residents entitled to state support. If care homes receive the LA fee for more residents, they might increase fees for any remaining self-funders. Alternatively, the LA fee might have to rise. We use two linked simulation models to examine how alternative assumptions on post-reform fees affect projected public costs and financial gains to residents of three potential reforms to the means test. Raising the LA fee rate to maintain income per resident would increase the projected public cost of the reforms by between 22% and 72% in the base year. It would reduce the average gain to care home residents by between 8% and 12%. Raising post-reform fees for remaining self-funders or requiring pre-reform self-funders to meet the difference between the LA and self-funder fees, reduces the gains to residents by 28-37%. For one reform, residents in the highest income quintile would face losses if the self-funder fee rises.

The effect of Medicaid nursing home reimbursement policy on Medicare hospice use in nursing homes

OBJECTIVE

To understand how changes in Medicaid nursing home (NH) reimbursement policy and rates affect a NH's approach to end-of-life care (ie, its use of hospice).

METHODS

This longitudinal study merged US NH decedents' (1999 to 2004) resident assessment data (MDS) with Part A claims data to determine the proportion of a NH's decedents using hospice. Freestanding NHs across the 48 contiguous US states were included. A NH-level analytic file was merged with NH survey (ie, OSCAR) and area resource file data, and with annual data on state Medicaid NH rates, case-mix reimbursement policies, and hospice certificate of need (CON). NH fixed-effect (within) regression analysis examined the effect of changing state policies, controlling for differing time trends in CON and case-mix states and for facility-level and county-level attributes. Models were stratified by urban/rural status.

RESULTS

A $10 increase in the Medicaid rate resulted in a 0.41% [95% confidence interval (CI): 0.275, 0.553] increase in hospice use in urban NHs and a 0.37% decrease (95% CI: -0.676, -0.063) in rural NHs not adjacent to urban areas. There was a nonstatistically significant increase in rural NHs adjacent to urban areas. Introduction of case-mix reimbursement resulted in a 2.14% (95% CI: 1.388, 2.896) increase in hospice use in urban NHs, with comparable increases in rural NHs.

CONCLUSIONS

This study supports and extends previous research by showing changes in Medicaid NH reimbursement policies affect a NH's approach to end-of-life care. It also shows how policy changes can have differing effects depending on a NH's urban/rural status.

Nursing home price and quality responses to publicly reported quality information

OBJECTIVE

To assess whether the release of Nursing Home Compare (NHC) data affected self-pay per diem prices and quality of care.

DATA SOURCES

Primary data sources are the Annual Survey of Wisconsin Nursing Homes for 2001-2003, Online Survey and Certification Reporting System, NHC, and Area Resource File.

STUDY DESIGN

We estimated fixed effects models with robust standard errors of per diem self-pay charge and quality before and after NHC.

PRINCIPAL FINDINGS

After NHC, low-quality nursing homes raised their prices by a small but significant amount and decreased their use of restraints but did not reduce pressure sores. Mid-level and high-quality nursing homes did not significantly increase self-pay prices after NHC nor consistently change quality.

CONCLUSIONS

Our findings suggest that the release of quality information affected nursing home behavior, especially pricing and quality decisions among low-quality facilities. Policy makers should continue to monitor quality and prices for self-pay residents and scrutinize low-quality homes over time to see whether they are on a pathway to improve quality. In addition, policy makers should not expect public reporting to result in quick fixes to nursing home quality problems.

The effect of state policies on nursing home resident outcomes

OBJECTIVES

To test the effect of changes in Medicaid reimbursement on clinical outcomes of long-stay nursing home (NH) residents.

DESIGN

Longitudinal, retrospective study of NHs, merging aggregated resident-level quality measures with facility characteristics and state policy survey data.

SETTING

All free-standing NHs in urban counties with at least 20 long-stay residents per quarter (length of stay > 90 days) in the continental United States between 1999 and 2005.

PARTICIPANTS

Long-stay NH residents

INTERVENTIONS

Annual state Medicaid average per diem reimbursement and the presence of case-mix reimbursement in each year.

MEASUREMENTS

Quarterly facility-aggregated, risk-adjusted quality-of-care measures surpassing a threshold for functional (activity of daily living) decline, physical restraint use, pressure ulcer incidence or worsening, and persistent pain.

RESULTS

All outcomes showed an improvement trend over the study period, particularly physical restraint use. Facility fixed-effect regressions revealed that a $10 increase in Medicaid payment increased the likelihood of a NH meeting quality thresholds by 9% for functional decline, 5% for pain control, and 2% for pressure ulcers but not reduced use of physical restraints. Facilities in states that increased Medicaid payment most showed the greatest improvement in outcomes. The introduction of case-mix reimbursement was unrelated to quality improvement.

CONCLUSION

Improvements in the clinical quality of NH care have been achieved, particularly where Medicaid payment has increased, generally from a lower baseline. Although this is a positive finding, challenges to implementing efficient reimbursement policies remain.

Do Medicaid wage pass-through payments increase nursing home staffing?

OBJECTIVE

To assess the impact of state Medicaid wage pass-through policy on direct-care staffing levels in U.S. nursing homes.

DATA SOURCES

Online Survey Certification and Reporting (OSCAR) data, and state Medicaid nursing home reimbursement policies over the period 1996-2004.

STUDY DESIGN

A fixed-effects panel model with two-step feasible-generalized least squares estimates is used to examine the effect of pass-through adoption on direct-care staff hours per resident day (HPRD) in nursing homes.

DATA COLLECTION/EXTRACTION METHODS

A panel data file tracking annual OSCAR surveys per facility over the study period is linked with annual information on state Medicaid wage pass-through and related policies.

PRINCIPAL FINDINGS

Among the states introducing wage pass-through over the study period, the policy is associated with between 3.0 and 4.0 percent net increases in certified nurse aide (CNA) HPRD in the years following adoption. No discernable pass-through effect is observed on either registered nurse or licensed practical nurse HPRD.

CONCLUSIONS

State Medicaid wage pass-through programs offer a potentially effective policy tool to boost direct-care CNA staffing in nursing homes, at least in the short term.