Do Medicaid reimbursement rates to nursing homes cover the costs of the services these facilities provide? That’s the basic question that UMass Boston gerontology researchers will work to answer over the next year.

“It’s a common claim that Medicaid reimbursements to nursing homes are much less than the actual costs of providing care. But when you try to look at documented empirical evidence, there’s not much there,” says Edward Miller, professor and chair of gerontology, who is leading the study for UMass Boston.

Working with Miller are Marc Cohen, clinical professor of gerontology and co-director of the LeadingAge LTSS Center @UMassBoston, and John Bowblis, professor of economics at Miami University of Ohio and a research fellow with the Scripps Gerontology Center. Their project, “Assessing Medicaid Rates and Costs in Nursing Facilities,” is funded by the Assistant Secretary for Planning and Evaluation at the U.S. Department of Health and Human Services and managed by Sara Karon at RTI International.

The seemingly simple question of whether reimbursements cover costs becomes a complicated one to answer on a national scale. “Each state sets its own Medicaid reimbursement rates, which is probably why there hasn’t been a systematic study of this,” Miller says. “The old maxim applies: If you’ve seen one nursing home reimbursement system, you’ve seen one reimbursement system.” The federal Center for Medicare and Medicaid Services (CMS) collects detailed, uniform information from nursing homes on their costs, making that side of the equation more straightforward to document. But on the reimbursement side, no organization systematically collects Medicaid reimbursement rates for nursing homes across all 50 states.

“The spark for taking on this work was the pandemic,” says Cohen. “The incredible toll that COVID-19 took on nursing homes only exaggerated the challenges the industry is facing.” Staff and residents at long-term care facilities accounted for 31% of all COVID deaths in the US as of June 2021.

The researchers will work to determine:

  • the average per diem Medicaid reimbursement rate to nursing facilities, by state and provider characteristics, overall and within each state;
  • the average per diem cost of caring for the Medicaid population residing in nursing facilities, by state and provider characteristics;
  • the key determinants of average cost and payment variation across each state; and
  • whether Medicaid payment levels in each state are aligned with the costs of providing care to Medicaid beneficiaries in nursing facilities.

Five UMass Boston gerontology graduate students are working on the project, collecting the data state by state. “It’s a behemoth task,” says doctoral student Elizabeth Simpson. “Our work is twofold: To find the reimbursement data for each facility in each state, and then to find the supporting documentation on what goes into those rates, because there are components that vary by state.”

It’s a challenging task, but Simpson sees the value in the project. “Working with data is something we all need to do,” she says of her fellow graduate students. “There’s no good way to learn about it in the classroom, you really have to experience it hands on. You have to find the data and transform it into something that you can compare with other data.”

Simpson knows that the study will offer useful information for people working in policy, in providing care, and more. “There’s a constant tension between nursing homes saying they don’t receive enough money, and the state always trying to pay the right amount but not too much,” she says. “It’s kind of astounding that this information is not readily available. But once I started looking into it, I realized that all of the policies vary so much, it can be hard to make fair comparisons.”

Read more of our February 2022 Advances newsletter