Medical Care

Skip Navigation LinksHome > October 2012 - Volume 50 - Issue 10 > The Relationship of California’s Medicaid Reimbursement Syst...
Medical Care:
doi: 10.1097/MLR.0b013e318264e4ce
Original Articles

The Relationship of California’s Medicaid Reimbursement System to Nurse Staffing Levels

Mukamel, Dana B. PhD*; Kang, Taewoon PhD; Collier, Eric PhD; Harrington, Charlene PhD

Collapse Box


Background: Policy initiatives at the Federal and state level are aimed at increasing staffing in nursing homes. These include direct staffing standards, public reporting, and financial incentives.

Objective: To examine the impact of California’s Medicaid reimbursement for nursing homes which includes incentives directed at staffing.

Research Design: Two-stage limited-information maximum-likelihood regressions were used to model the relationship between staffing [registered nurses (RNs), licensed practical nurses, and certified nursing assistants hours per resident day] and the Medicaid payment rate, accounting for the specific structure of the payment system, endogeneity of payment and case-mix, and controlling for facility and market characteristics.

Sample: A total of 927 California free-standing nursing homes in 2006.

Measures: The model included facility characteristics (case-mix, size, ownership, and chain affiliation), market competition and excess demand, labor supply and wages, unemployment, and female employment. The instrumental variable for Medicaid reimbursement was the peer group payment rate for 7 geographical market areas, and the instrumental variables for resident case-mix were the average county revenues for professional therapy establishments and the percent of county population aged 65 and over.

Results: Consistent with the rate incentives and rational expectation behavior, expected nursing home reimbursement rates in 2008 were associated with increased RN staffing levels in 2006 but had no relationship with licensed practical nurse and certified nursing assistant staffing. The effect was estimated at 2 minutes per $10 increase in rate.

Conclusions: The incentives in the Medicaid system impacted only RN staffing suggesting the need to improve the state’s rate setting methodology.

© 2012 Lippincott Williams & Wilkins, Inc.


Article Tools


Article Level Metrics

Search for Similar Articles
You may search for similar articles that contain these same keywords or you may modify the keyword list to augment your search.