Case-mix reimbursement for nursing home services: simulation approach

Nursing home reimbursement based on case mix is a matter of growing interest. Several States either use or are considering this reimbursement method. In this article, we present a method for evaluating key outcomes of such a change for Connecticut nursing homes. A simulation model is used to replicate payments under the case-mix systems used in Maryland, Ohio, and West Virginia. The findings indicate that, compared with the system presently used in Connecticut, these systems would better relate dollar payments to measure patient need, and for-profit homes would benefit relative to nonprofit homes. The Ohio methodology would impose the most additional costs, the West Virginia system would actually be somewhat less expensive in terms of direct patient care payments.