Medicaid Reimbursement Rates and Access to Nursing Homes

Abstract

Medicaid reimbursement rates vary widely around the country and at times are just 70 to 80 percent of prevailing private pay rates. These differences may create economic incentives for nursing homes to discriminate against Medicaid applicants. The 1997 National Nursing Home Survey of Current Residents provides the opportunity to develop a ratio of Medicaid to private pay rates for a nationally representative sample of 6,081 residents. Logistic regression modeling shows that even when controlling for sex, race, marital status, and functional level, residents are less likely to be on Medicaid at admission when the ratio is small than when it is close to 1.0. Older Blacks and Hispanics, and older unmarried persons, are more likely to be on Medicaid; therefore, they are more likely to face delay or denial of admission. A possible policy resolution comes from Minnesota, where an equalization law requires nursing home and welfare state officials to work together to set rates, making discriminatory practices against vulnerable groups illegal.