By Jennifer M. McGivney
LTSS Center researchers found that Medicaid payments don’t cover nursing home care costs. Now, they wonder how payment-to-cost ratios affect nursing home outcomes.
How do Medicaid reimbursement rates affect nursing home outcomes? The LeadingAge LTSS Center @UMass Boston received a two-year grant from The Donaghue Foundation to investigate this question.
The new research builds on last fall’s report by UMass Boston researchers showing that Medicaid reimbursements do not cover the actual costs of nursing home care for Medicaid beneficiaries. The high-level findings of the group’s study, published in Assessing Medicaid Payment Rates and Costs of Caring for the Medicaid Population Residing in Nursing Homes, showed that the average nursing home receives just 82 cents in reimbursement for each dollar it spends providing daily care to a Medicaid recipient.
“Now that we know, on a facility-by-facility basis, what the Medicaid payments are, what the nursing home costs are, and the relationship between payments and costs, we can relate those to outcomes,” says Edward Alan Miller, principal investigator of the study and a professor and chair of the Department of Gerontology at UMass Boston.
The researchers will now seek to answer new questions about how these payment-to-cost ratios affect outcomes, including nursing homes’ five-star ratings and quality outcomes, such as falls or hospitalizations.
“What this project represents is the creative merging of disparate pieces of a puzzle as it relates to the financing of nursing homes and quality,” says Marc Cohen, LTSS Center co-director and a project team member. “It takes advantage of a government investment in these data sets and uses them to bring new knowledge into the discussion in a coherent way.”
Findings from the new study could significantly inform policy as policymakers, providers, and consumer advocates focus increased attention on nursing home staffing levels, quality of care, and budgets.
“The nursing home industry is under tremendous financial pressure at a time when there are demands on the industry to make more investments in patient care,” says Cohen. “At the same time, the supplemental pandemic payments from the government are now gone. How can you meet the goals of increasing quality of care? If you’re going to invest dollars, it’s important to know which things really make a difference.”
For more information about the new research, visit the Gerontology Institute Blog.