Objective. To examine the effect of Medicaid reimbursement rates on nursing home quality in the presence of certificate-of-need (CON) and construction moratorium laws.
Data Sources/Study Setting. A single cross-section of Medicaid certified nursing homes in 1999 (N=13,736).
Study Design. A multivariate regression model was used to examine the effect of Medicaid payment rates and other explanatory variables on risk-adjusted pressure ulcer incidence. The model is alternatively considered for all U.S. nursing home markets, those most restrictive markets, and those high-Medicaid homes to isolate potentially resource-poor environments.
Data Extraction Methods. A merged data file was constructed with resident-level information from the Minimum Data Set, facility-level information from the On-Line, Survey, Certification, and Reporting (OSCAR) system and market- and state-level information from various published sources.
Principal Findings. In the analysis of all U.S. markets, there was a positive relationship between the Medicaid payment rate and nursing home quality. The results from this analysis imply that a 10 percent increase in Medicaid payment was associated with a 1.5 percent decrease in the incidence of risk-adjusted pressure ulcers. However, there was a limited association between Medicaid payment rates and quality in the most restrictive markets. Finally, there was a strong relationship between Medicaid payment and quality in high-Medicaid homes providing strong evidence that the level of Medicaid payment is especially important within resource poor facilities.
Conclusions. These findings provide support for the idea that increased Medicaid reimbursement may be an effective means toward improving nursing home quality, although CON and moratorium laws may mitigate this relationship.