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Assessing Medicaid Payment Rates and Costs of Caring for the Medicaid Population Residing in Nursing Homes: Final Report

Publication Date
Authors
John R. Bowblis, Edward Alan Miller, Elizabeth Simpson, Andrew G. Alberth, Maryssa Pallis, Sarita Karon, Holden Selkirk, Iara Oliveira, Judith Dey, Marie Squillace, Marc A. Cohen

The purpose of this research was to understand the relationship between state Medicaid payment rates to nursing homes and those facilities’ costs of providing care to Medicaid residents. Using 2019 Medicaid payment data collected from individual states and Medicare Cost Reports for freestanding nursing homes in 44 states, we calculated the national average and median per diem Medicaid payment rates, per diem costs of caring for the Medicaid population, and the Medicaid payment-to-cost ratios. We found that Medicaid payment rates for the average or median nursing home covered about 82 cents per every dollar of reported cost nursing homes incurred caring for Medicaid residents. For approximately 40% of nursing homes, Medicaid per diem payments covered 80% or less of their estimated per diem Medicaid costs. The majority, or 52% of nursing homes, had 80-100% of their Medicaid per diem costs covered; and the remaining 8% had payments exceeding their per diem costs. Not-for-profit nursing homes had the lowest Medicaid payment-to-cost ratio compared to for-profits and government-owned nursing homes. Nursing homes with total nursing staff levels below 3.00 hours per resident day had the highest average Medicaid payment-to-cost ratio of 0.85, whereas nursing homes with nursing staff levels above 4.0 hours per resident day had the lowest average Medicaid payment-to-cost ratio at 0.77. This study did not address the adequacy of the Medicaid payment or whether nursing homes were operating efficiently or were adequately staffed based on the acuity of their residents.

This research was compiled or funded by HHS/ASPE’s Office of Behavioral Health, Disability, and Aging Policy (BHDAP). Additional research in this area is available at the ASPE Aging & Disability page and ASPE Long-Term Services & Supports/Long-Term Care page.

*This content is in the process of Section 508 review. If you need immediate assistance accessing this content, please submit a request to Brenda Veazey, brenda.veazey@hhs.gov. Content will be updated pending the outcome of the Section 508 review.

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Files
Assessing Medicaid Payment Rates and Costs of Caring for the Medicaid Population Residing in Nursing Homes: Final Report (pdf, 782.94 KB)
Topics
Long-Term Services & Supports (LTSS) | Nursing Homes & Facilities | Post-Acute Care & Services | Skilled Nursing Facilities (SNFs) | Long-Term Care Policy & Regulation
Product Type
Report
Populations
Older Adults | Medicare-Medicaid Dual-Eligible | Medicare Beneficiaries | People with Disabilities
Location- & Geography-Based Data
National Data
Program
Medicaid | Medicare