Trends in Medicaid Nursing Home Reimbursement: 1978-89

Medicaid nursing home reimbursement is of concern because of implications for nursing home expenditures. This article presents data on State Medicaid nursing home reimbursement methods, ratesetting methods, and average per diem rates, refining earlier data and updating through 1989. A trend in the early 1980s toward adopting prospective systems played out by the end of the decade. There were trends, however, toward casemix methods, which may increase access for high-need patients, and toward cost-center limits on nursing, which may provide incentives to lower quality care. Analysis supports previous findings that prospective systems allow greater control over increases in rates.