Nursing Home Reimbursement Rates

As we discussed in Chapter 1, the federal government gives each state flexibility in establishing its own Medicaid reimbursement methods and rates for nursing home services. While the five states examined all use prospective, facility-specific reimbursement methods, the way each state has designed its reimbursement system varies significantly. The combination of historical, facilityspecific costs, reimbursement limits, and the use of case-mix adjustments results in considerable variation in daily reimbursement rates both among states and within each state.