The payment rate which Medicaid offers nursing homes does much to determine whether Medicaid beneficiaries in need of nursing home care will gain access to care. If the rate is set "too low" relative to facility cost or to the price private residents are willing to pay, Medicaid beneficiaries will be unable to gain admission to existing beds. We hypothesize that rates that vary with facility costs (as opposed to fixed class rates) will make Medicaid residents more attractive to facilities, supporting better access, and that stronger private demand will diminish access. To investigate this, we compute a population-adjusted measure of Medicaid utilization at the county level and use multivariate regression analysis to estimate the impact of Medicaid rate characteristics after accounting for the effect of beds per thousand elders, private demand factors, and other market factors. The findings for these rate characteristics include: 1) Medicaid utilization is significantly greater, by about 6.5% at sample means, in states with cost-based as opposed to class rates; 2) In states that use cost-based payment systems, a longer lag to the cost base year is associated with lower access; 3) Medicaid access, as indicated by the utilization variable, is slightly but significantly higher where the average rate is higher, although the responsiveness of use to the rate is less in class-rate than in non-class-rate states. We conclude that payment factors play a statistically significant role: use is lower where Medicaid rates are lower, where rates are fixed, and where re-basing is infrequent.
Learning Objectives: At the close of the session, participants will be able to discuss categorization of Medicaid nursing home rate methods and the effect of Medicaid rate methods and private demand factors on the utilization of existing nursing home bed capacity by Medicaid beneficiaries.
Keywords: Nursing Home Markets, Medicaid
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: None
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.