The economic implications of case-mix Medicaid reimbursement for nursing home care

Assessing the Quality of Human Immunodeficiency Virus Care in Nursing Homes

BACKGROUND

Quality of human immunodeficiency virus (HIV) care in nursing homes (NHs) has never been measured.

DESIGN

A cross-sectional study.

SETTING

NHs.

PARTICIPANTS

A total of 203 NHs and 1375 persons living with HIV.

MEASUREMENTS

Medicare claims from 2011 to 2013 were linked to assessments of resident health, prescription dispensing data, and national reports of NH characteristics. Five nationally validated HIV care quality measures (prescription of antiretroviral therapy; CD4/viral load monitoring; frequency of medical visits; gaps in medical visits; and Pneumocystis pneumonia prophylaxis) were adapted and applied to NHs. Logistic regression predicted compliance by organizational factors. Random intercept logistic regression predicted if persons living with HIV received care by person and organizational factors.

RESULTS

Compliance ranged from 43.3% (SD = 31.1%) for CD4/viral load monitoring to 92.4% (SD = 13.6%) for gaps in medical visits. More substantiated complaints against an NH decreased the likelihood of high compliance with CD4/viral load monitoring (odds ratio [OR] = 0.846; 95% confidence interval [CI] = 0.726-0.986), while NH-reported incidents increased the likelihood of high compliance with pneumocystis pneumonia prophylaxis (OR = 1.173; 95% CI = 1.044-1.317). Differences between NHs explained 21.2% or less of variability in receipt of care.

CONCLUSIONS

Since 2013, the population with HIV and NH HIV care quality has inevitably evolved; however, this study provides previously unknown baseline metrics on NH HIV care quality and highlights significant challenges when measuring HIV care in NHs. J Am Geriatr Soc 68:1226-1234, 2020.

Nursing Homes with Persistent High and Low Quality

This article examines the concentration of low- and high-quality care within particular nursing facilities over time. The authors explore three different explanations for persistent low and high quality over time including the level of public reimbursement, the presence of bed constraint policies such as certificate-of-need and construction moratoria, and the role of consumer information. Using 1991 through 1999 data from the On-Line Survey, Certification, and Reporting system, the authors show that both low- and high-quality nursing home care is concentrated in certain facilities over time. Their results further show that public reimbursement and asymmetric information are both important factors in explaining why low quality persists over time in certain facilities.

Medicaid nursing facility rates, capacity, and utilization: a structural analysis

This analysis extends earlier work using national data to examine Medicaid nursing facility (NF) utilization (participants per aged population) and its interrelationships with Medicaid per diem NF reimbursement rates and NF bed capacity, using state-level data over 19 years to estimate two-stage structural equations. Findings demonstrate complex relationships among these factors. Reimbursement rates showed no demonstrable impact on utilization but positive effects on beds. Beds, in turn, positively predict utilization and negatively predict rates. Findings suggest that policy makers might focus on constraining Medicaid NF costs through controlling bed stock rather than by keeping rates lower, which can have untoward effects on quality and equity.

Determinants of performance failure in the nursing home industry

This study investigates the determinants of performance failure in U.S. nursing homes. The sample consisted of 91,168 surveys from 10,901 facilities included in the Online Survey Certification and Reporting system from 1996 to 2005. Failed performance was defined as termination from the Medicare and Medicaid programs. Determinants of performance failure were identified as core structural change (ownership change), peripheral change (related diversification), prior financial and quality of care performance, size and environmental shock (Medicaid case mix reimbursement and prospective payment system introduction). Additional control variables that could contribute to the likelihood of performance failure were included in a cross-sectional time series generalized estimating equation logistic regression model. Our results support the contention, derived from structural inertia theory, that where in an organization's structure change occurs determines whether it is adaptive or disruptive. In addition, while poor prior financial and quality performance and the introduction of case mix reimbursement increases the risk of failure, larger size is protective, decreasing the likelihood of performance failure.

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

There is great variability in how much nursing home providers are paid for a day of care for a Medicaid recipient, how the payment level is set, and what mechanisms are used to reimburse facilities. Given the absence of recent, comprehensive in-depth analyses of state reimbursement systems, this article undertakes a comparative case analysis of Medicaid nursing facility reimbursement in Alabama, California, Minnesota, Texas, Washington, and Wisconsin. Findings indicate that states design their methods of reimbursement to achieve desired policy outcomes related to facility cost and quality, access to care, payment equity, service capacity, and budgetary control. The result, however, has been the development of enormously complex and demanding rate-setting methodologies, the adverse consequences of which can outweigh and overwhelm the discrete policy objectives contained in the reimbursement formula. This complexity highlights the potential trade-off between achieving desired goals and costly administrative burdens, opportunities for appeal and disagreement, difficulties understanding the ramifications of system changes, reliance on simplified decision-making rules, and exclusion of otherwise interested parties from the policy process.

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.

Impact of Medicaid reimbursement on mental health quality indicators

OBJECTIVE

To examine the relationship between the use of the Minimum Data Set (MDS) for determining Medicaid reimbursement to nursing facilities and the MDS Quality Indicators examining nursing facility residents' mental health.

DATA SOURCES

The 2004 National MDS facility Quality Indicator reports served as the dependent variables. Explanatory variables were based on the 2004 Online Survey Certification and Reporting system (OSCAR) and an examination of existing reports, a review of the State Medicaid Plans, and State Medicaid personnel.

STUDY DESIGN

Multilevel regression models were used to account for the hierarchical structure of the data.

DATA COLLECTION

MDS and OSCAR data were linked by facility identifiers and subsequently linked with state-level variables.

PRINCIPAL FINDINGS

The use of the MDS for determining Medicaid reimbursement was associated with higher (poorer) quality indicator values for all four mental health quality indicators examined. This effect was not found in four comparison quality indicators.

CONCLUSIONS

The findings indicate that documentation of mental health symptoms may be influenced by economic incentives. Policy makers should be cautioned from using these measures as the basis for decision making, such as with pay-for-performance initiatives.

Nurse staffing levels and Medicaid reimbursement rates in nursing facilities

OBJECTIVE

To examine the relationship between nursing staffing levels in U.S. nursing homes and state Medicaid reimbursement rates.

DATA SOURCES

Facility staffing, characteristics, and case-mix data were from the federal On-Line Survey Certification and Reporting (OSCAR) system and other data were from public sources.

STUDY DESIGN

Ordinary least squares and two-stage least squares regression analyses were used to separately examine the relationship between registered nurse (RN) and total nursing hours in all U.S. nursing homes in 2002, with two endogenous variables: Medicaid reimbursement rates and resident case mix.

PRINCIPAL FINDINGS

RN hours and total nursing hours were endogenous with Medicaid reimbursement rates and resident case mix. As expected, Medicaid nursing home reimbursement rates were positively related to both RN and total nursing hours. Resident case mix was a positive predictor of RN hours and a negative predictor of total nursing hours. Higher state minimum RN staffing standards was a positive predictor of RN and total nursing hours while for-profit facilities and the percent of Medicaid residents were negative predictors.

CONCLUSIONS

To increase staffing levels, average Medicaid reimbursement rates would need to be substantially increased while higher state minimum RN staffing standards is a stronger positive predictor of RN and total nursing hours.

Explaining direct care resource use of nursing home residents: findings from time studies in four states

OBJECTIVE

To explain variation in direct care resource use (RU) of nursing home residents based on the Resource Utilization Groups III (RUG-III) classification system and other resident- and unit-level explanatory variables.

DATA SOURCES/STUDY SETTING

Primary data were collected on 5,314 nursing home residents in 156 nursing units in 105 facilities from four states (CO, IN, MN, MS) from 1998 to 2004. Study Design. Nurses and other direct care staff recorded resident-specific and other time caring for all residents on sampled nursing units. Care time was linked to resident data from the Minimum Data Set assessment instrument. Major variables were: RUG-III group (34-group), other health and functional conditions, licensed and other professional minutes per day, unlicensed minutes per day, and direct care RU (wage-weighted minutes). Resident- and unit-level relationships were examined through hierarchical linear modeling.

DATA COLLECTION/EXTRACTION METHODS

Time study data were recorded with hand-held computers, verified for accuracy by project staff at the data collection sites and then merged into resident and unit-level data sets.

PRINCIPAL FINDINGS

Resident care time and RU varied between and within nursing units. RUG-III group was related to RU; variables such as length of stay and unit percentage of high acuity residents also were significantly related. Case-mix indices (CMIs) constructed from study data displayed much less variation across RUG-III groups than CMIs from earlier time studies.

CONCLUSIONS

Results from earlier time studies may not be representative of care patterns of Medicaid and private pay residents. New RUG-III CMIs should be developed to better reflect the relative costs of caring for these residents.

A Quality-Based Payment Strategy for Nursing Home Care in Minnesota

This article describes a pay-for-performance system developed for Minnesota nursing homes. In effect, nursing homes can retain a greater proportion of the difference between their costs and the average costs on the basis of their quality scores. The quality score is a derived and weighted composite measure currently composed of five elements: staff retention (25 points), staff turnover (15 points), use of pool staff (10 points), nursing home quality indicators (40 points), and survey deficiencies (10 points). Information on residents' quality of life and satisfaction, derived from interviews with a random sample of residents in each Minnesota nursing home, is now available for inclusion in the quality measure. The new payment system was designed to create a business case for quality when used in addition to a nursing home report card that uses the same quality elements to inform potential consumers about the quality of nursing homes. Although the nursing home industry has announced general support for the new approach, it has lobbied the legislature to delay its implementation, claiming concerns about operational details.

The effect of state medicaid case-mix payment on nursing home resident acuity

OBJECTIVE

To examine the relationship between Medicaid case-mix payment and nursing home resident acuity.

DATA SOURCES

Longitudinal Minimum Data Set (MDS) resident assessments from 1999 to 2002 and Online Survey Certification and Reporting (OSCAR) data from 1996 to 2002, for all freestanding nursing homes in the 48 contiguous U.S. states.

STUDY DESIGN

We used a facility fixed-effects model to examine the effect of introducing state case-mix payment on changes in nursing home case-mix acuity. Facility acuity was measured by aggregating the nursing case-mix index (NCMI) from the MDS using the Resource Utilization Group (Version III) resident classification system, separately for new admits and long-stay residents, and by an OSCAR-derived index combining a range of activity of daily living dependencies and special treatment measures.

DATA COLLECTION/EXTRACTION METHODS

We followed facilities over the study period to create a longitudinal data file based on the MDS and OSCAR, respectively, and linked facilities with longitudinal data on state case-mix payment policies for the same period.

PRINCIPAL FINDINGS

Across three acuity measures and two data sources, we found that states shifting to case-mix payment increased nursing home acuity levels over the study period. Specifically, we observed a 2.5 percent increase in the average acuity of new admits and a 1.3 to 1.4 percent increase in the acuity of long-stay residents, following the introduction of case-mix payment.

CONCLUSIONS

The adoption of case-mix payment increased access to care for higher acuity Medicaid residents.

Bariatric Programs in Nursing Homes

The increase in prevalence of obesity in older individuals and the association of obesity with increased morbidity, functional decline, hospitalization, and complications is expected to increase the number of individuals who have obesity requiring nursing home care, particularly subacute and short-term rehabilitation. Providing appropriate nursing home care to residents who have obesity requires environmental modifications, specialized equipment, and staff training. Effective nursing home care of residents who have obesity is interdisciplinary and requires special nursing, medical, nutritional, psychosocial, and rehabilitation considerations.

The influence of financial incentives and racial status on the use of post-hospital care

This study examines the influence of financial incentives and the racial status of the patient on the use of extended care following an episode of hospitalization. Post-hospital care (PHC) is defined as the services provided by a skilled nursing facility (SNF) or intermediate care facility (ICF) following discharge. The focus of the analysis is on the use or nonuse of PHC, the presence or absence of a delay in transfer to an ICF or SNF and, limited to those who experienced a postponement, the length of the delayed discharge. After controlling for multiple factors, the results indicate that Medicare beneficiaries were more likely to use PHC, less likely to experience a delay in discharge, and used fewer days of prolonged care. Medicaid recipients and uninsured patients experienced reduced access to PHC. The results also indicated that the access of Native Americans and Americans to PHC was impeded.

Recent trends in state nursing home payment policies

State Medicaid programs pay for a sizable portion of overall nursing home expenditures. The repeal of the Boren amendment in 1997 gave states greater freedom to set Medicaid nursing home policy. This study presents data from a comprehensive survey of state nursing home payment policies during 1999-2002. Aggregate inflation-adjusted Medicaid payment rates rose steadily, and there was no sizable increase in the adoption of other cost-cutting policies. Although these findings can be interpreted with some optimism from a nursing home financing perspective, areas of concern remain for state nursing home policy during the next several years.

Medicaid payment and risk-adjusted nursing home quality measures

Various studies have observed low quality in the nursing home industry. Although Medicaid is the dominant payer of U.S. nursing home services, the association of Medicaid payment rates and quality is not entirely clear, in part because resident-level, risk-adjusted information on quality is lacking. This study examined the relationship between Medicaid payment rates and three risk-adjusted quality measures, controlling for market and facility characteristics. Higher payment was associated with lower incidence of pressure ulcers and physical restraints but not daily pain. Quality of nursing home care may suffer if budget shortfalls force state legislatures to freeze or reduce Medicaid rates.