Nursing Home COVID Relief Under QIP's Performance-Based Formula: Does Performance Actually Matter, and Should It?

The Quality Incentive Program (QIP) distributed US$2 billion to nursing homes (NHs) that met performance goals primarily related to their COVID-19 infection rates. We examine how QIP affected 15,331 NHs with different facility and community attributes, and the extent to which QIP payments per resident-week (QIP$) were associated with NHs' COVID-related attributes. We find that QIP$ was primarily determined by county (not facility) infection rates. QIP distributed US$2 billion to NHs for months in which they experienced virtually no COVID-19 cases; US$0 was distributed for months in which they experienced more than 300,000 cases. We find that QIP$ was larger for smaller, nonprofit NHs located in more rural and economically distressed communities. Regression analyses reveal that recipients of larger QIP$ maintained greater supplies of personal protective equipment, conducted more staff testing, and limited admissions of infected residents, and that greater staff testing and limited admissions are also associated with NHs' sustained success in receiving QIP payments. Policymakers should consider whether performance-based payment systems are optimal for addressing public health emergencies.