The impact of Medicare reimbursement changes on staffing and the quality of care in nursing homes

This study assesses the impact of recent Medicare reimbursement changes on nurse staffing and quality of care in skilled nursing facilities. We utilise data from the Online Survey Certification and Reporting System and Area Resource Files for the years 1997–2003. The impacts of the reimbursement changes on licensed nurse hours per resident day and on a quality index were estimated, controlling for facility and market factors, and including interaction between payer mix and policy. We find that the 1997 Balanced Budget Act had a negative effect on staffing and quality while the 1999 Balanced Budget Reconciliation Act and the 2000 Benefits Improvement and Protection Act had positive effects on staffing and quality. The percentage of Medicaid patients was a strong contributor to lower staffing and quality, and moderated the effects of all three policies. The results should be useful for policy makers considering cuts in Medicare or Medicaid spending for nursing homes.