Medicaid payment rates and nursing home staffing levels across ownership types

Medicaid is the largest payer for long-stay nursing home care, yet the relationship between payment and quality is understudied. Given the relationship of staffing to quality of care, this study aimed to investigate the association between Medicaid payment rates and nursing staff levels in nursing homes, both overall and by ownership type (for-profit, not-for-profit, government).

The study employed a retrospective, cross-sectional analysis using a nationwide, facility-level database, comprising facility-level Medicaid payment rates collected directly from the states, staffing levels derived from the Payroll-Based Journal (PBJ), and facility and resident characteristics from the Medicare Cost Reports and Certification and Survey Provider Enhanced Reporting (CASPER). Multivariate regression with state fixed effects was used to assess the relationship between Medicaid payment and staffing levels. The final sample accounted for 9,510 freestanding nursing homes across the United States.

Results demonstrate significant associations between Medicaid payment rates and total, nurse aide, and registered nurse staffing levels. Medicaid payment rates were not consistently associated with licensed practical nurse staffing levels. Findings did not vary across not-for-profit, for-profit, and government nursing homes.

Medicaid reimbursement levels affect nursing staff levels in nursing homes, regardless of ownership type. Policymakers should consider Medicaid payment rates when setting nursing home policy to support staffing and sustain quality of care.