The Centers for Medicare and Medicaid Services' Nursing Home Case-Mix and Quality Demonstration: a descriptive overview

This paper presents the first comprehensive account of a major national demonstration designed to integrate skilled nursing facilities (SNF) prospective case-mix payment and quality of care. It describes the Centers for Medicare and Medicaid Services' Nursing Home Case-Mix and Quality (NHCMQ) Demonstration-the template for Medicare's SNF Prospective Payment System (PPS) implemented July 1998. The NHCMQ Demonstration provided the basis for one of the most significant changes in SNF reimbursement and quality monitoring policies to date. Prospective reimbursement policies created positive incentive for providers to admit Medicare residents under more equitable payment rates. However, controversy regarding unanticipated perverse provider incentives remains. The quality management system designed under the NHCMQDemonstration is currently used in over 17,000 nursing homes. Furthermore, under the NHCMQ Demonstration, one standardized assessment tool-the MDS-was used to assess a resident's clinical condition, to monitor quality, and to calculate provider reimbursement. Experiences from the NHCMQ Demonstration and continued evaluation of the current national PPS, along with state systems, provide a rich information source regarding prospective, case-mix reimbursement, and provider incentives.     

Can Bundled Payment Improve Quality and Efficiency of Care for Patients with Hip Fractures?

The current Medicare reimbursement for hip fractures lacks accountability and promotes cost cutting. A bundled payment system—analogous to the Medicare Acute Care Episodes Demonstration for Orthopedic and Cardiovascular Surgery—may help curtail costs, foster communication among health care providers, and improve their accountability for patient outcomes. In hip fracture care, bundled payment may spur development of multidisciplinary best practice guidelines, quality assessment, and reporting, and result in benchmarking and best practices sharing. However, its implementation may face challenges: the need for quality assessment criteria and risk adjustment methods and possible risks of pushing costs outside of Medicare boundaries.     

Bringing Assisted Living Services into Congregate Housing

Beginning in April 2000 and continuing for 21 months, Florida's legislature allocated $31.6 million (annualized) to nursing homes through a Medicaid direct care staffing adjustment. Florida's legislature paid the highest incentives to nursing homes with the lowest staffing levels and the greatest percentage of Medicaid residents—the bottom tier of quality. Using Donabedian's structure-process-outcomes framework, this study tracks changes in staffing, wages, process of care, and outcomes. The incentive payments increased staffing and wages in nursing home processes (decreased restraint use and feeding tubes) for the facilities receiving the largest amount of money but had no change on pressure sores or decline in activities of daily living. The group receiving the lowest incentives payment (those highest staffed at baseline) saw significant improvement in two quality measures: pressure sores and decline in activities of daily living. All providers receiving more resources improved on deficiency scores, suggesting more Medicaid spending improves quality of care regardless of total incentive payments.     

Medicaid Beneficiaries' Access to Residential Care Settings

Residential care settings (RCSs) are community-based housing and supportive services providers. Medicaid beneficiaries' access to RCSs is of concern to policymakers and other stakeholders because most people prefer community-based to institutional services and RCSs are generally less expensive than nursing homes. To better understand Medicaid beneficiaries' access to state-licensed RCSs, we examined Medicaid policies in 50 states and the District of Columbia, interviewed seven subject-matter experts, and conducted four state case studies informed by reviews of state policies and interviews with 27 stakeholders. Factors identified as influencing Medicaid beneficiaries' access to RCSs include Medicaid reimbursement rates for RCS services, the supply of Medicaid-certified RCSs and RCS beds, and policies that affect RCS room and board costs for Medicaid beneficiaries. Shifting Medicaid spending toward community-based instead of institutional care may require attention to these interrelated issues of RCS payment, supply, and room and board costs.     

The Program of All-Inclusive Care for the Elderly (PACE)

Summary

This article examines the long-term care service system in the United States, its problems, and an improved long-term care model. Problematic quality of care in institutional settings and fragmentation of service coordination in community-based settings are two major issues in the traditional long-term care system. The Program of All-Inclusive Care for the Elderly (PACE) has been emerging since the 1970s to address these issues, particularly because most frail elders prefer community-based to institutional care. The Balanced Budget Act of 1997 made PACE a permanent provider type under Medicare and granted states the option of paying a capitation rate for PACE services under Medicaid. The PACE model is a managed long-term care system that provides frail elders alternatives to nursing home life. The PACE program's primary goals are to maximize each frail elderly participant's autonomy and continued community residence, and to provide quality care at a lower cost than Medicare, Medicaid, and private-pay participants, who pay in the traditional fee-for-service system. In exchange for Medicare and Medicaid fixed monthly payments for each participating frail elder, PACE service systems provide a continuum of long-term care services, including hospital and nursing home care, and bear full financial risk. Integration of acute and long-term care services in the PACE model allows care of frail elders with multiple problems by a single service organization that can provide a full range of services. PACE's range of services and organizational features are discussed.     

The influence of financial incentives and racial status on the use of post-hospital care

This study examines the influence of financial incentives and the racial status of the patient on the use of extended care following an episode of hospitalization. Post-hospital care (PHC) is defined as the services provided by a skilled nursing facility (SNF) or intermediate care facility (ICF) following discharge. The focus of the analysis is on the use or nonuse of PHC, the presence or absence of a delay in transfer to an ICF or SNF and, limited to those who experienced a postponement, the length of the delayed discharge. After controlling for multiple factors, the results indicate that Medicare beneficiaries were more likely to use PHC, less likely to experience a delay in discharge, and used fewer days of prolonged care. Medicaid recipients and uninsured patients experienced reduced access to PHC. The results also indicated that the access of Native Americans and Americans to PHC was impeded.     

Constructing Deservingness

Abstract

This study examines the influence of financial incentives and the racial status of the patient on the use of extended care following an episode of hospitalization. Post-hospital care (PHC) is defined as the services provided by a skilled nursing facility (SNF) or intermediate care facility (ICF) following discharge. The focus of the analysis is on the use or nonuse of PHC, the presence or absence of a delay in transfer to an ICF or SNF and, limited to those who experienced a postponement, the length of the delayed discharge. After controlling for multiple factors, the results indicate that Medicare beneficiaries were more likely to use PHC, less likely to experience a delay in discharge, and used fewer days of prolonged care. Medicaid recipients and uninsured patients experienced reduced access to PHC. The results also indicated that the access of Native Americans and Americans to PHC was impeded.     

Resource Effects on Access to Long-Term Care for Frail Older People

Abstract

Access to long-term care depends primarily on personal resources, including family members and income, and on external resources, including Medicaid and Medicare. This study investigates how resources affect frail older individuals' access to long-term care, with a focus on Black and White widows. Data from the 1989 National Long-Term Care Survey is used, in conjunction with state-level Medicaid and Medicare reimbursement rates for nursing home and home health care, to estimate the likelihood of five types of care arrangements. Results show that children are a primary resource for unmarried individuals in maintaining access to informal care. Income effects are nonlinear in relation to nursing home care: increasing incomes below the mean income are associated with decreasing probabilities of nursing home care, while increasing incomes above the mean are associated with increasing probabilities of nursing home care. Income and Medicaid effects are interrelated, with nonlinearities associated with income having the potential to adversely affect some older persons' ability to access nursing home care.     

Strengthening Social Protection in East Asia,Mukul G. Asher and Fukunari Kimura (Eds.)

Few studies have analyzed for-profit and nonprofit differences in the home health care sector. Using data from the National Home and Hospice Care Survey, we found that patients in nonprofit agencies were more likely to be discharged within 30 days under Medicare cost-based payment compared to patients in for-profit agencies. However, this difference in length of enrollment did not translate into meaningful differences in discharge outcomes between nonprofit and for-profit patients, suggesting that—under a cost-based payment system—nonprofits may behave more efficiently relative to for-profits. These results highlight the importance of organizational and payment factors in the delivery of home health care services.     

Physician case-by-case assignment and participation in Medicare

The prospect of budget cuts in Medicare is likely to result in less generous reimbursements from Medicare and thus affects physicians' willingness to accept Medicare patients with the reduced payments. This study examines physicians' decisions about case-by-case assignment and participation in Medicare in relation to Medicare reimbursement generosity. A two-part model is applied to a database from a national survey of physicians. The results indicate that reimbursement generosity from private insurance relative to that from Medicare negatively affects physicians' assignment rates, implying that the elderly's access to health care and/or the financial burden is likely to be jeopardized by further reductions in Medicare reimbursements.     

The Quality Indicator Survey: Background,Implementation, and Widespread Change

The Quality Indicator Survey (QIS) is the most comprehensive regulatory change to the nursing home survey process since the Omnibus Budget Reconciliation Act of 1987 (OBRA-87). In this article we describe the policy evolution that led to the QIS, summarize the QIS method and implementation, and profile the QIS survey results. Following over a decade of development, in 2007 the Centers for Medicare and Medicaid Services (CMS) began the national rollout of QIS. The intent was to improve consistency in the nursing home survey and to render the survey process more resident-centered and aligned with the intent of OBRA-87. We reviewed policy reports and firsthand accounts from the lead developer of the QIS methodology and leader of the national training contract for QIS. Changes in survey findings are profiled based on analysis of the publicly available Nursing Home Compare database from 2004 to 2010. Nineteen states implemented the QIS between 2007 and 2010, with nearly 20% of U.S. nursing homes receiving QIS surveys in 2010. Nursing homes surveyed with the QIS received more survey deficiencies on average than in the traditional survey; however, average numbers of deficiencies across states became more similar over the early implementation of QIS, with lower-than-average geographic areas experiencing increases and higher-than-average geographic areas experiencing decreases in survey deficiencies. The explicit and structured questioning of residents in the QIS is associated with increases in deficiencies related to choice, dignity, dental care, and nurse staffing. We describe ways in which the QIS affected the regulatory agencies, providers, and resident communities, although these effects are difficult to quantify. CMS's implementation of QIS is a significant step toward a more resident-centered, comprehensive, and consistent survey process. Substantial changes, however, are required not only among regulators but also among nursing homes. We argue that these new expectations and norms surrounding quality assessment and quality assurance are an important component of achieving culture change in U.S. nursing homes.     

‘Incentivizing Recovery’ follow‐up: White paper was a ‘first step’

Last week's issue featured the announcement of a new payment model for addiction treatment, a combination of capitated and bundled reimbursement that places the treatment provider at risk in the event of repeat admissions. Greg Williams, executive vice president of Facing Addiction with NCADD, described the rationale for the system: Treatment providers should not be paid if patients don't get well. Anne Marie Polak, senior director at Leavitt Partners and in charge of the “Incentivizing Recovery” project the organization is convening, described the basics of how the project works. None of the treatment organizations participated in the project, which resulted in the white paper released Sept. 7 (see ADAW, Sept. 17).     

The Program of All-Inclusive Care for the Elderly (PACE): an innovative long-term care model in the United States

This article examines the long-term care service system in the United States, its problems, and an improved long-term care model. Problematic quality of care in institutional settings and fragmentation of service coordination in community-based settings are two major issues in the traditional long-term care system. The Program of All-Inclusive Care for the Elderly (PACE) has been emerging since the 1970s to address these issues, particularly because most frail elders prefer community-based to institutional care. The Balanced Budget Act of 1997 made PACE a permanent provider type under Medicare and granted states the option of paying a capitation rate for PACE services under Medicaid. The PACE model is a managed long-term care system that provides frail elders alternatives to nursing home life. The PACE program's primary goals are to maximize each frail elderly participant's autonomy and continued community residence, and to provide quality care at a lower cost than Medicare, Medicaid, and private-pay participants, who pay in the traditional fee-for-service system. In exchange for Medicare and Medicaid fixed monthly payments for each participating frail elder, PACE service systems provide a continuum of long-term care services, including hospital and nursing home care, and bear full financial risk. Integration of acute and long-term care services in the PACE model allows care of frail elders with multiple problems by a single service organization that can provide a full range of services. PACE's range of services and organizational features are discussed.     

An empirical examination of cost-adjusting in outpatient clinics

This paper presents an empirical methodology for examining cost-adjusting in relation to multiple-output health care providers. The methodology is subsequently implemented using a sample of California outpatient clinics. The empirical evidence is that these clinics do cost-adjust; that is, the clinics respond to low Medicare reimbursement by using lower quality to control the marginal costs of those patient groups not insured under a government-sponsored plan. In addition, clinics do not cost-adjust with respect to Medi-Cal patients, implying that various government reimbursement systems have different effects on a provider’s cost-adjusting behavior.     

European Union Policy on Older Adult Learning: A Critical Commentary

Recently, some researchers have argued that high state rates of Centers for Medicare and Medicaid Services (CMS) Online Survey, Certification and Reporting (OSCAR) nursing facility deficiencies indicate stringent enforcement, leaving the impression of better-quality care soon to follow; others maintain that the rank ordering of states' quality of nursing facility care remains fairly constant, resting on deep-seated state characteristics that change slowly, so that short-term improvement in poor-quality care is unlikely. The authors examine change in the process and outcome quality of states' Medicare nursing facility long-term care programs across 1999 to 2005, using linear and two-stage least squares regression. They find that (1) nationally, process quality generally falls across this period while outcome quality generally increases; (2) neither a prominent enforcement stringency index nor state culture, a relatively stable state characteristic, exerts much influence on state process and outcome quality scores over time, but (3) the relative costs and benefits for CMS compliance appear to contribute to explaining change in states' quality of resident outcomes over time; and (4) states' process quality is much less stable than outcome quality, and outcome indices distinct from OSCAR deficiency data provide more reliable and possibly more valid measures of care quality.     

Chain reaction: an exploratory study of nursing home bankruptcy in California

This paper reports on an exploratory study of nursing home bankruptcy. From state and industry data regarding nearly 1,000 California facilities, it was possible to identify 155 homes in five chains (multi-facility organizations) that were operating in bankruptcy in 2000. When compared with facilities in non-bankrupt chains, while the bankrupt chain facilities had significantly worse financial liquidity, higher administrative costs, and higher payables to related parties, they also had more Medicare residents, fewer Medicaid residents, better solvency, and were located in less competitive county markets and in areas with higher Medicaid reimbursement rates. These findings indicate that, rather than facility characteristics and local market factors, strategic decisions taken at the corporate (chain) level are the major determinants of nursing facility bankruptcy status.     

Florida's Efforts to Improve Quality of Nursing Home Care Through Nurse Staffing Standards,Regulation, and Medicaid Reimbursement

Between 1999 and 2007, Florida implemented two initiatives combining legislative, regulatory, and reimbursement strategies to increase nurse staffing levels in nursing homes to improve quality of care. Despite a $40 million incentive package allocated for direct-care staffing, per-resident-day staffing increased only after legislative requirements mandated minimum nursing hours per resident day. Total Medicaid expenditures grew by $1.1 billion over the 8 years; per diem rates increased 65% to reimburse providers' costs. Registered nurses' hours decreased, while licensed nurses' and paraprofessionals' hours increased. This article describes the impact of staffing policy changes, includes stakeholders' views about approaches to achieve quality outcomes, and documents state policy implementation efforts. Seven lessons from the implementation of state nurse staffing standards to improve quality of care outcomes are also presented.     

Briefly Noted

The Centers for Medicare & Medicaid Services (CMS) has expanded Medicare beneficiaries' access to telehealth, allowing payment for individual psychotherapy, patient education and group psychotherapy that are delivered in “temporary expansion locations, including patients' homes.” In addition, it will consider adding more services if providers show they are interested in doing this. The April 30 decision will temporarily allow Community Mental Health Centers to offer partial hospitalization and other mental health services to clients in their homes. The CMS previously announced that Medicare would pay for certain services conducted by audio‐only telephone between beneficiaries and their doctors, but has broadened that list to include many behavioral health and patient education services. The payments for telephone visits now match payments for similar office and outpatient visits, retroactive to March 1, 2020. Instead of using a rulemaking process to add Medicare services that may be furnished via telehealth, the CMS will continue to add these during the COVID‐19 emergency on a subregulatory basis, taking into consideration “requests by practitioners now learning to use telehealth as broadly as possible.” And the CMS is waiving the video requirement for certain “evaluation and management services” — the office visits with the doctor — and now these can be provided by telephone only. Some beneficiaries don't have access to the technology for video, or don't want to use it. For more information, go to https://www.cms.gov/newsroom/press‐releases/trump‐administration‐issues‐second‐round‐sweeping‐changes‐support‐us‐healthcare‐system‐during‐covid .     

Medicaid nursing facility reimbursement in flux: effects of federal regulatory changes and prevailing fiscal conditions, 1978-1998

Basic concepts and trends are examined in Medicaid nursing facility reimbursements between 1978 and 1998, because Medicaid payment reform is a common budget reduction strategy pursued by state officials. Non-incremental changes in state rate-setting methods, as well as incremental changes in per diem rates and expenditures per recipient, are analyzed. In addition to substantial cross-state variation, results reveal clear trends in reimbursement policy characteristics over time. Not only do these track closely with changes in the federal regulatory environment, but they also track closely with prevailing fiscal and economic conditions. Given the serious ramifications reimbursement policy changes can have for nursing home residents and providers, it is imperative that the impact of federal disengagement from this policy area be understood.     

The affordable care act and long-term care: comprehensive reform or just tinkering around the edges?

The Patient Protection and Affordable Care Act (ACA) includes several provisions that aim to improve prevailing deficiencies in the nation's long-term care system. But just how effective is the ACA likely to be in addressing these challenges? Will it result in meaningful or marginal reform? This special issue of Journal of Aging & Social Policy seeks to answer these questions. The most prominent long-term care provision is the now-suspended Community Living Assistance Services and Supports Act. Others include incentives and options for expanding home- and community-based care, a number of research and demonstration projects in the areas of chronic care coordination and the dually eligible, and nursing home quality reforms. There are also elements that seek to improve workforce recruitment and retention, in addition to benefit improvements and spending reductions under Medicare. This article reviews the basic problems plaguing the long-term care sector and the provisions within the ACA meant to address them. It also includes a brief overview of issue content.