The Effect of Medicaid Nursing Home Reimbursement Policy on Medicare Hospice Use in Nursing Homes

Abstract

To understand how changes in Medicaid nursing home (NH) reimbursement policy and rates affect a NH's approach to end-of-life care (ie, its use of hospice). This longitudinal study merged US NH decedents' (1999 to 2004) resident assessment data (MDS) with Part A claims data to determine the proportion of a NH's decedents using hospice. Freestanding NHs across the 48 contiguous US states were included. A NH-level analytic file was merged with NH survey (ie, OSCAR) and area resource file data, and with annual data on state Medicaid NH rates, case-mix reimbursement policies, and hospice certificate of need (CON). NH fixed-effect (within) regression analysis examined the effect of changing state policies, controlling for differing time trends in CON and case-mix states and for facility-level and county-level attributes. Models were stratified by urban/rural status. A $10 increase in the Medicaid rate resulted in a 0.41% [95% confidence interval (CI): 0.275, 0.553] increase in hospice use in urban NHs and a 0.37% decrease (95% CI: -0.676, -0.063) in rural NHs not adjacent to urban areas. There was a nonstatistically significant increase in rural NHs adjacent to urban areas. Introduction of case-mix reimbursement resulted in a 2.14% (95% CI: 1.388, 2.896) increase in hospice use in urban NHs, with comparable increases in rural NHs. This study supports and extends previous research by showing changes in Medicaid NH reimbursement policies affect a NH's approach to end-of-life care. It also shows how policy changes can have differing effects depending on a NH's urban/rural status.