The Medicaid reimbursement program and reported nursing care in the Massachusetts long-term care industry

David Nicholas Mishol, Boston College

Abstract

Several states have implemented Medicaid reimbursement systems which pay nursing facilities according to the type of resident receiving care. In some 'casemix-adjusted' programs, payment is based on the provision of care, and there are incentives to increase the supply of care as payments increase. This dissertation, consisting of three distinct sections, provides an overview of the Massachusetts Medicaid program for long-term care, and empirically examines the relationship between reimbursement and reported nursing care. The first chapter is descriptive in nature by providing a chronological account of the prospective system's evolution from 1990 through 1997. By providing a background to the policy and planning cycle used in the regulatory process, this section gives the reader not only an understanding of how the Medicaid program works but also how modifications are made to the system in an effort to achieve a high quality/low cost program for the delivery of long-term care services. The second chapter empirically examines the price/quantity relationship in this program. Controlling for unobservable time-invariant facility-specific effects I find that an increase in the reimbursement rate induces nursing facilities to increase the amount of reported nursing care. However, the response is highly inelastic, implying that the return to the state's increased investment in the health care of its elderly and most vulnerable citizens is minimal. Moreover, since these findings are based on unaudited data, the additional care actually provided to residents may even be less than the reported findings. The third chapter estimates Cox proportional hazard models to examine how changes in public reimbursement affect the frequency at which individuals move among the various payment categories. Applying fixed effects partial likelihood methods, I find that changes in average reimbursement affect transitions to higher, but not lower, payment categories. Moreover, additional analysis reveals that the majority of these payment effects are concentrated in nursing facilities with above-average error rates, suggesting that reimbursement decisions by state regulators may have little, if any, effect on the true provision of long-term care.

Recommended Citation

David Nicholas Mishol, "The Medicaid reimbursement program and reported nursing care in the Massachusetts long-term care industry" (January 1, 1998). Boston College Dissertations and Theses. Paper AAI9915566.
http://escholarship.bc.edu/dissertations/AAI9915566