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.