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⭒ New Developments

Staffing-Focused Medicaid Incentive Payments Work

A new study finds that targeted, incentive payments to nursing homes that reach threshold staffing levels are largely successful.  The study’s authors reviewed the effects of Medicaid rate increases in Illinois.  One rate increase was generalized, meaning every nursing home received an increase with no strings attached.  This approach “led to no discernible change in any dimension of staffing.”  A second rate increase was tied to minimum staffing levels and led to significant increases in staffing levels – 5.35% overall and 9% in nursing homes with a relatively large share of Medicaid residents.  The authors concluded that “connecting reimbursement schedules to staffing levels can be an effective lever to reduce [nursing home] staffing shortages.”  California has moved from a generalized rate increase system (AB 1629) to a more incentive-based approach (AB 186).  This study indicates that California should be even more aggressive in tying Medi-Cal rates to staffing levels in order to ensure taxpayer funding for nursing homes goes to direct care and not to owners’ pockets.