An Approach to Estimating State-Level Medicaid Nursing Home Spending

To create and validate a measure of state-level, average daily Medicaid nursing home spending rates using publicly available data sources.

We created a new state-level measure of average daily Medicaid nursing home payment rates, calculating Medicaid spending per day divided by estimated Medicaid days. We compared this new measure to existing benchmarks in 2004 and 2019 and estimated correlations (Pearson and Spearman rank coefficients).

To create the new measure, we used data from Brown University's Long-Term Care Focus website and the Medicaid Long-Term Services and Supports Annual Expenditure Report, covering nursing home spending and characteristics from most states.

The measure of state-level average daily Medicaid nursing home spending demonstrated strong positive correlations with both historical data (Pearson [r] = 0.70, Spearman rank [ρ] = 0.80) and government-published estimates (r = 0.68, ρ = 0.63).

The new, validated measure offers a reliable and transparent method for comparing Medicaid nursing home payment rates across states using only publicly available data. Importantly, this approach enables timely, cross-state comparisons without the need for restricted or proprietary data, improving transparency and removing barriers to policy evaluation.