Improving the Quality of Long-Term Care (2001) / Chapter Skim
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Reimbursing to Improve Quality of Care
Reimbursing to Improve Quality of Care
Pages 235-247
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From page 235... ...
Some studies have linked poor quality of care in nursing homes to low Medicaid payment rates, but others have posited that quality-of-care deficiencies should be attributed to factors such as excess demand (Nyman, 1993~. Although relatively little is known about the effect of reimbursement on quality of care in nursing homes, virtually nothing is known about its impact on other settings or on home and community-based services.
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From page 236... ...
Second, the Balanced Budget Act of 1997 also dramatically altered Medicare reimbursement methods for nursing homes and home health agencies and combined these changes with large budget savings. In some cases the changes have been major.
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From page 237... ...
Using 1983 data from Iowa, Nyman (1988b) found that costs were not significantly greater in nursing homes with higher quality as measured by various outcomes (including wearing clean clothing, being fully dressed, and having clean hair)
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From page 238... ...
Recommendation 8.1: The committee recommends that, before making decisions to reduce reimbursements, state officials carefully assess the impact on access to services and on quality of care of any proposed reductions in Medicaid reimbursements for nursing home, home health and other home and communitybased services. Recommendation 8.2: The committee recommends that the Department of Health and Human Services fund and support research to better understand the effects of payment policies on accessibility and quality of long-term care services, including the following: · the effects of low reimbursement rates or changes in Medicare and Medicaid reimbursement policies on providers of nursing home, home health, or other long-term care services; · the effects of current payment systems, such as prospective payment for nursing facilities and interim payment systems for home health agencies, on the accessibility and quality of services; and · whether states with low Medicaid reimbursement rates (adjusted for geographic variation in prices and other statespecific requirements)
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From page 239... ...
Almost all states use prospective payment systems to pay nursing homes. Under prospective payment, providers receive a rate set in advance for a bundle of services, without adjustment for actual costs.
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From page 240... ...
Prospective payment also can affect patient care services differently, depending on the bundle of services included in the unit of payment. For example, prospective payment rates may or may not include ancillary services such as prescription drugs and therapy services.
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From page 241... ...
mandated the establishment of casemix-adjusted prospective payment systems for various Medicare post-acute care services, including nursing facility and home health services. These changes were expected to result in substantial reductions in Medicare expenditures for home health agencies and nursing facilities compared to what expenditures would have been without the changes.
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From page 242... ...
This third ceiling, average perbeneficiary expenditures, which is 75 percent based on facility-specific experience and 25 percent based on regional average costs, makes it difficult for agencies to change their service mix to provide either more expensive nursing services or more home health aide visits per patient. The interim payment system for home health care is very controversial.
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From page 243... ...
The report noted the difficulties of designing a prospective payment system for home health care that "appropriately classified patients who require both short- and longer-term home health services" (MedPAC, 1999, p.92~. Responding to the uproar caused by the Balanced Budget Act, in 1999 Congress passed and President Clinton signed the Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP)
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From page 244... ...
An alternative explanation is that the relationship between homes that are heavily dependent on Medicaid and low quality is attributable to an insufficient supply of nursing home beds available for Medicaid residents (i.e., excess demand) , which means that facilities need not compete by providing high-quality care (Nyman, 1993, 1988a,b,c)
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From page 245... ...
In addition to quality, the presence of excess demand in the nursing home market creates concern about access to nursing home care, especially for Medicaid residents. Private demand should not be affected by Medicaid demand or bed supply since private-pay residents always have
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From page 246... ...
As a result, most states control the supply of nursing homes through certificate-of-need programs or moratoriums on new construction or certification for Medicaid. State efforts to shift the balance of the long-term care system from institutional-based to home and community-based care by expanding home care services and using case management and preadmission screening efforts to encourage placement in settings other than nursing homes may also reduce excess demand.
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From page 247... ...
Lowering Medicaid nursing home reimbursement rates may be especially problematic in states with high levels of excess demand, since nursing homes in these states do not have to compete for consumers on the basis of quality. Reducing excess demand would lower the quality risks of reducing nursing home rates, but probably would result in higher Medicaid expenditures overall.
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