Medicaid payment rates, case-mix reimbursement, and nursing home staffing - 1996-2004

Objective: We examined the impact of state Medicaid payment rates and case-mix reimbursement on direct care staffing levels in US nursing homes. Methods: We used a recent time series of national nursing home data from the Online Survey Certification and Reporting system for 1996-2004, merged with annual state Medicaid payment rates and case-mix reimbursement information. A 5-category response measure of total staffing levels was defined according to expert recommended thresholds, and examined in a multinomial logistic regression model. Facility fixed-effects models were estimated separately for Registered Nurse (RN), Licensed Practical Nurse (LPN), and Certified Nurse Aide (CNA) staffing levels measured as average hours per resident day. Results: Higher Medicaid payment rates were associated with increases in total staffing levels to meet a higher recommended threshold. However, these gains in overall staffing were accompanied by a reduction of RN staffing and an increase in both LPN and CNA staffing levels. Under case-mix reimbursement, the likelihood of nursing homes achieving higher recommended staffing thresholds decreased, as did levels of professional staffing. Independent of the effects of state, market, and facility characteristics, there was a significant downward trend in RN staffing and an upward trend in both LPN and CNA staffing. Conclusions: Although overall staffing may increase in response to more generous Medicaid reimbursement, it may not translate into improvements in the skill mix of staff. Adjusting for reimbursement levels and resident acuity, total staffing has not increased after the implementation of case-mix reimbursement.