Medicare payment changes and nursing home quality: effects on long-stay residents

The Balanced Budget Act of 1997 dramatically changed the way that Medicare pays skilled nursing facilities, providing a natural experiment in nursing home behavior. Medicare payment policy (directed at short-stay residents) may have affected outcomes for long-stay, chronic-care residents if services for these residents were subsidized through cost-shifting prior to implementation of Medicare prospective payment for nursing homes. We link changes in both the form and level of Medicare payment at the facility level with changes in resident-level quality, as represented by pressure sores and urinary tract infections in Minimum Data Set (MDS) assessments. Results show that long-stay residents experienced increased adverse outcomes with the elimination of Medicare cost reimbursement.     

Initial home health outcomes under prospective payment

OBJECTIVE: To assess initial changes in home health patient outcomes under Medicare's home health Prospective Payment System (PPS), implemented by the Centers for Medicare and Medicaid Services (CMS) in October 2000. DATA SOURCES/STUDY SETTING: Pre-PPS and early PPS data were obtained from CMS Outcome and Assessment Information Set (OASIS) and Medicare claims files. STUDY DESIGN: Regression analysis was applied to national random samples (n=164,810) to estimate pre-PPS/PPS outcome and visit-per-episode changes. DATA COLLECTION/EXTRACTION METHODS: Outcome episodes were constructed from OASIS data and linked with Medicare claims data on visits. PRINCIPAL FINDINGS: Outcome changes (risk adjusted) were mixed and generally modest. Favorable changes included higher improvement rates under PPS for functioning and dyspnea, higher community discharge rates, and lower hospitalization and emergent care rates. Most stabilization (nonworsening) outcome rates also increased. However, improvement rates were lower under PPS for wounds, incontinence, and cognitive and emotional/behavioral outcomes. Total visits per episode (case-mix adjusted) declined 16.6 percent although therapy visits increased by 8.4 percent. CONCLUSIONS: The outcome and visit results suggest improved system efficiency under PPS (fewer visits, similar outcomes). However, declines in several improvement rates merit ongoing monitoring, as do subsequent (posthome health) hospitalization and emergent care use. Since only the early PPS period was examined, longer-term analyses are needed.     

Effects of Medicare payment reform: Evidence from the home health interim and prospective payment systems

Medicare continues to implement payment reforms that shift reimbursement from fee-for-service toward episode-based payment, affecting average and marginal payment. We contrast the effects of two reforms for home health agencies. The home health interim payment system in 1997 lowered both types of payment; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The home health prospective payment system in 2000 raised average but lowered marginal payment with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality.     

Effects of state minimum staffing standards on nursing home staffing and quality of care

Objective. To investigate the impact of state minimum staffing standards on the level of staffing and quality of nursing home care.
Data Sources. Online Survey and Certification Reporting System (OSCAR) merged with the Area Resource File from 1998 through 2001.
Study Design. Between 1998 and 2001, 16 states implemented or expanded staffing standards in excess of federal requirements, creating a natural experiment in comparison with facilities in states without new standards. Difference-in-differences models using facility fixed effects were estimated to determine the effect of state standards.
Data Collection/Extraction Methods. OSCAR data were linked to the data on market conditions and state policies. A total of 55,248 facility-year observations from 15,217 freestanding facilities were analyzed.
Principal Findings. Increased standards resulted in small staffing increases for facilities with staffing initially below or close to new standards. Yet the standards were associated with reductions in restraint use and the number of total deficiencies at all types of facilities.
Conclusions. Mandated staffing standards affect only low-staff facilities facing potential for penalties, and effects are small. Selected facility-level outcomes may show improvement at all facilities due to a general response to increased standards or to other quality initiatives implemented at the same time as staffing standards.     

The influence of staffing characteristics on quality of care in nursing homes

OBJECTIVE: The influence staffing levels, turnover, worker stability, and agency staff had on quality of care in nursing homes was examined. DATA SOURCES/STUDY SETTING: Staffing characteristics came from a survey of nursing homes (N=1,071) conducted in 2003. The staffing characteristics were collected for Nurse Aides, Licensed Practical Nurses, and Registered Nurses. Fourteen quality indicators came from the Nursing Home Compare website report card and nursing home organizational characteristics came from the Online Survey, Certification, and Recording system. STUDY DESIGN: One index of quality (the outcome) was created by combining the 14 quality indicators using exploratory factor analysis. We used regression analyses to assess the effect of the four staffing characteristics for each of the three types of nursing staff on this quality index in addition to individual analyses for each of the 14 quality indicators. The effect of organizational characteristics as well as the markets in which they operated on outcomes was examined. We examined a number of different model specifications. PRINCIPAL FINDINGS: Quality of care was influenced, to some degree, by all of these staffing characteristics. However, the estimated interaction effects indicated that achieving higher quality was dependent on having more than one favorable staffing characteristic--the effect of quality was larger than the sum of the independent effects of each favorable staffing characteristic. CONCLUSIONS: Our results indicate that staff characteristics such as turnover, staffing levels, worker stability, and agency staff should be addressed simultaneously to improve the quality of nursing homes.     

Assessing nursing home care quality through Bayesian networks

This article demonstrates how Bayesian networks can be employed as a tool to assess the quality of care in nursing homes. For the data sets analyzed, the proposed model performs comparably to existing quantitative assessment models. In addition, a Bayesian network approach offers several uniques advantages. The structure and parameters of a Bayesian network provide rich insight into the multidimensional aspects of the quality of care. Bayesian networks can be used as a guide in implementing limited resources by identifying information that would be most relevant to an assessment. Finally, Bayesian networks provide a straightforward framework for integrating nursing home care quality research that is conducted in various locations and for various purposes.     

The mortality effects of changing public funding for home health care: An empirical analysis of Medicare home health care in the United States

In light of population aging, it is important to understand whether limiting public in‐kind transfers to the elderly affects elderly mortality. I focus on home health care—a popular in‐kind transfer—and I exploit variation in the Medicare home health care reimbursement that arose in 1997 in the United States to study whether cuts to government coverage of home health care affected elderly mortality. Under the identifying assumptions of the DID model, I find that the cuts affected total mortality for some men but not women, suggesting that changes in home health care can affect elderly mortality and differences in mortality between men and women. For men aged between 65 and 74, the Interim Payment System was associated with an increase in mortality equal to 0.6%, an effect in absolute value comparable to the mortality response to a one percentage point change in unemployment rates and within the range of other estimates of the impact of health insurance on elderly mortality.     

Does Prospective Payment Really Contain Nursing Home Costs?

OBJECTIVE: To examine whether nursing homes would behave more efficiently, without compromising their quality of care, under prospective payment. DATA SOURCES: Four data sets for 1994: the Skilled Nursing Facility Minimum Data Set, the Online Survey Certification and Reporting System file, the Area Resource File, and the Hospital Wage Indices File. A national sample of 4,635 nursing homes is included in the analysis. STUDY DESIGN: Using a modified hybrid functional form to estimate nursing home costs, we distinguish our study from previous research by controlling for quality differences (related to both care and life) and addressing the issues of output and quality endogeneity, as well as using more recent national data. Factor analysis was used to operationalize quality variables. To address the endogeneity problems, instrumental measures were created for nursing home output and quality variables. PRINCIPAL FINDINGS: Nursing homes in states using prospective payment systems do not have lower costs than their counterpart facilities under retrospective cost-based payment systems, after quality differences among facilities are controlled for and the endogeneity problem of quality variables is addressed. CONCLUSIONS: The effects of prospective payment on nursing home cost reduction may be through quality cuts, rather than cost efficiency. If nursing home payments under prospective payment systems are not adjusted for quality, nursing homes may respond by cutting their quality levels, rather than controlling costs. Future outcomes research may provide useful insights into the adjustment of quality in the design of prospective payment for nursing home care.     

Quality care indicators and staffing levels in a nursing facility subacute unit

OBJECTIVE: To determine whether admissions to a subacute unit in a university-affiliated nursing facility received equivalent care on weekdays as opposed to on weekends with regard to certified nursing assistant (CNA) and licensed nurse staffing levels. DESIGN/SETTING: A 6-month prospective analytical study conducted from January to July 2000. All subacute unit residents admitted to this unit were monitored for the presence of specific outcome measures that were correlated to CNA and licensed nurse staffing levels during the day shift. The setting was a 14-bed subacute unit within a 150-bed skilled nursing facility in Atlanta, GA. PRIMARY OUTCOME MEASURES: The quality care indicators used were measured by objective data obtained prospectively from the chart and medication administration record. The parameters monitored included medication errors, falls, presence of required daily nursing note and documentation of meals eaten. Each resident served as his or her own control for analyses conducted between Tuesdays and Thursdays (weekdays) as opposed to Saturdays and Sundays (weekends). Median staffing ratios compared the number of CNAs and licensed nurses on duty between weekdays with the number who were on duty on weekends during each resident's stay. RESULTS: From January until July 2000, a total of 31 residents (25 women, 6 men) were admitted to the subacute unit. Among these residents, the total of weekday and weekend 24-hour reviews was equal to 1,044 resident care days during this 6-month study. The age range of these residents was 65 to 104 years, with a mean age of 82.0 years. Median nurse staffing levels were lower on weekend than on weekday day shifts (3 vs. 4; P < 0.001). Median CNA staffing levels were also lower on weekend than on weekday day shifts (4 vs. 5; P < 0.001). A total of 12 (39%) of 31 of residents were missing a total of 22 of 1,044 total required notes. This was 2 (0.3%) of 522 for weekdays as compared with 20 (3.8%) of 522 for weekends (P < 0.001). With regard to documentation of food intake, data were omitted for 199 of 1,884 meals on weekdays as compared with 343 (18.2%) of 1,884 meals on weekends (P < 0.001). The rate for falls was 1 (0.19%) of 522 on weekdays as compared with 4 (0.77%) of 522 on weekends (P < 0.05). There was no significant difference in medication errors detected. CONCLUSIONS: There was a significant decrease in staffing levels for both nurses and CNAs during the day shift on weekends. Increased omission of required daily nursing notes, of meal documentation and increased falls appears to be associated with lower levels of weekend staffing. There were no significant differences in medication errors during this study. Whether the lapses in documentation actually resulted in a lower level of delivered care cannot be determined at this time.     

Effects of Payment Changes on Trends in Post-Acute Care

Objective. To test how the implementation of new Medicare post-acute payment systems affected the use of inpatient rehabilitation facilities (IRFs), skilled nursing facilities (SNFs), and home health agencies.
Data Sources. Medicare acute hospital, IRF, and SNF claims; provider of services file; enrollment file; and Area Resource File data.
Study Design. We used multinomial logit models to measure realized access to post-acute care and to predict how access to alternative sites of care changed in response to prospective payment systems.
Data Extraction Methods. A file was constructed linking data for elderly Medicare patients discharged from acute care facilities between 1996 and 2003 with a diagnosis of hip fracture, stroke, or lower extremity joint replacement.
Principal Findings. Although the effects of the payment systems on the use of post-acute care varied, most reduced the use of the site of care they directly affected and boosted the use of alternative sites of care. Payment system changes do not appear to have differentially affected the severely ill.
Conclusions. Payment system incentives play a significant role in determining where Medicare beneficiaries receive their post-acute care. Changing these incentives results in shifting of patients between post-acute sites.     

Explaining direct care resource use of nursing home residents: findings from time studies in four states

OBJECTIVE: To explain variation in direct care resource use (RU) of nursing home residents based on the Resource Utilization Groups III (RUG-III) classification system and other resident- and unit-level explanatory variables. DATA SOURCES/STUDY SETTING: Primary data were collected on 5,314 nursing home residents in 156 nursing units in 105 facilities from four states (CO, IN, MN, MS) from 1998 to 2004. Study Design. Nurses and other direct care staff recorded resident-specific and other time caring for all residents on sampled nursing units. Care time was linked to resident data from the Minimum Data Set assessment instrument. Major variables were: RUG-III group (34-group), other health and functional conditions, licensed and other professional minutes per day, unlicensed minutes per day, and direct care RU (wage-weighted minutes). Resident- and unit-level relationships were examined through hierarchical linear modeling. DATA COLLECTION/EXTRACTION METHODS: Time study data were recorded with hand-held computers, verified for accuracy by project staff at the data collection sites and then merged into resident and unit-level data sets. PRINCIPAL FINDINGS: Resident care time and RU varied between and within nursing units. RUG-III group was related to RU; variables such as length of stay and unit percentage of high acuity residents also were significantly related. Case-mix indices (CMIs) constructed from study data displayed much less variation across RUG-III groups than CMIs from earlier time studies. CONCLUSIONS: Results from earlier time studies may not be representative of care patterns of Medicaid and private pay residents. New RUG-III CMIs should be developed to better reflect the relative costs of caring for these residents.     

Modeling the impact of Medicare Advantage payment cuts on ambulatory care sensitive and elective hospitalizations

Objective. To assess relationships between changes in Medicare Advantage (MA) payment rates and Medicare beneficiary hospitalizations and to simulate the effects of scheduled payment cuts on ambulatory care sensitive (ACS) and elective hospitalization rates. Data. State Inpatient Database discharge abstracts from Arizona, Florida, and New York merged with administrative Medicare enrollment and MA payment data. Study Design. Retrospective, fixed effect regression analysis of the relationship between MA payment rates and rates of ACS and elective hospitalizations among Medicare beneficiaries in counties with at least 10,000 Medicare beneficiaries and 3 percent MA penetration from 1999 to 2005. Principal Findings. MA payment rates were negatively related to rates of ACS admissions. Simulations suggest that payment cuts could be associated with higher rates of ACS admissions. No relationship between MA payments and rates of elective hospitalizations was found. Conclusions. Reductions in MA payment rates may result in a small increase in ACS admissions. Trends in ACS admissions among chronically ill Medicare beneficiaries should be tracked following MA payment cuts.     

Assessing the impact of enforcement and compliance with minimum staffing standards on the quality of care in nursing homes: Evidence from the Centers for Medicare and Medicaid Services' staff star rating downgrade policy

Policymakers have historically attempted to influence quality in nursing homes through the imposition of minimum staffing standards and through the public dissemination of quality on websites like Care Compare. One current Federal standard necessitates a registered nurse (RN) on duty for at least eight consecutive hours each day. In 2018, the Centers for Medicare and Medicaid Services announced that they would incentivize compliance with this requirement by downgrading nursing homes with 7+ days without an RN present during the quarter by one star on their Care Compare staffing domain quality rating. This study evaluates the impact of this new enforcement mechanism. Using an intent-to-treat sample of nursing homes at risk for downgrade with difference-in-differences and event study models, it finds that the policy increased compliance and staffing levels. Using the policy to instrument for full compliance, it finds that the daily presence of an RN causally improves several quality dimensions.     

Physician behavior changes following CME on the prospective payment system in long-term care: a pilot study

INTRODUCTION: Physicians must understand regulatory changes in long-term care (LTC) and adhere to prospective payment system (PPS) guidelines for minimum data set (MDS), resource utilization groups (RUG) and resident assessment instrument (RAI) processes, documentation, and evaluation. We pilot-tested "Prospective Payment System in LTC," a 7.5 hour continuing medical education (CME) program designed to help participants make plans to implement and adhere to PPS guidelines and regulatory requirements. METHODS: Twelve medical directors or attending physicians participated. A "commitment to change" evaluation assessed whether participants' plans were reasonable and were implemented, and what barriers interfered. Participants identified 3-5 changes they intended to make. Three months later, participants estimated actual implementation of intended changes, identified obstacles to success, and rated PPS's impacts on patient care. RESULTS: Respondents "committed" to an average of 3.4 changes ranging from "better monitor transfers from LTC to acute care" to "train nurses re MDS and RUGs." Of 40 commitments, 0%100% progress were reported on 9 (23%) each. Mean implementation rate was 41%. Removing responses reporting 0% implementation, the rate was 53%. Common barriers were "lack of time," and "can't get attending MDs to meetings." MDs' ratings of PPSs' impacts were neutral (2.9 on a scale where 1 = "PPS causes great deterioration in quality of care," 3 = "...no change." and 5 = "...great improvement.") both immediately and 3 months post-course. CONCLUSIONS: Participants made reasonable plans consistent with course objectives and made progress implementing most intentions. LTC physicians who attended the CME course intended to alter their behaviors, but significant obstacles interfered, at least in the short term. Most thought PPS would not change the quality of care provided in their institutions. Future courses should address implementation barriers.     

The Impact of the Affordable Care Act on Medicare Advantage Plan Availability and Enrollment

Objective

To assess the impact of the Patient Protection and Affordable Care Act''s (ACA) changes in Medicare Advantage (MA) payment rates on the availability of and enrollment in MA plans.

Data Sources

Secondary data on MA plan offerings, contract offerings, and enrollment by state and county, in 2010–2011.

Study Design

We estimated regression models of the change in the number of plans, the number of contracts, and enrollment as a function of quartiles of FFS spending and pre-ACA MA payment generosity. Counties in the lowest quartile of spending are treated most generously by the ACA.

Principal Findings

Relative to counties in the highest quartile of spending, the number of plans in counties in the first, second, and third quartiles rose by 12 percent, 7.6 percent, and 5.4 percent, respectively. Counties with more generous MA payment rates before the ACA lost significantly more plans. We did not find a similar impact on the change in contracts or enrollment.

Conclusions

The ACA-induced MA payment changes reduced the number of plan choices available for Medicare beneficiaries, but they have yet affected enrollment patterns.     

Relationship of nursing home staffing to quality of care

OBJECTIVE: To compare nursing homes (NHs) that report different staffing statistics on quality of care. DATA SOURCES: Staffing information generated by California NHs on state cost reports and during onsite interviews. Data independently collected by research staff describing quality of care related to 27 care processes. STUDY DESIGN: Two groups of NHs (n=21) that reported significantly different and stable staffing data from all data sources were compared on quality of care measures. DATA COLLECTION: Direct observation, resident and staff interview, and chart abstraction methods. PRINCIPAL FINDINGS: Staff in the highest staffed homes (n=6), according to state cost reports, reported significantly lower resident care loads during onsite interviews across day and evening shifts (7.6 residents per nurse aide [NA]) compared to the remaining homes that reported between 9 to 10 residents per NA (n=15). The highest-staffed homes performed significantly better on 13 of 16 care processes implemented by NAs compared to lower-staffed homes. CONCLUSION: The highest-staffed NHs reported significantly lower resident care loads on all staffing reports and provided better care than all other homes.