title: Administrative and policy issues in reimbursement for nursing home capital investment.
abstract: The way in which states reimburse for nursing home capital costs can create incentives for nursing home owners to use the home primarily as a vehicle for real estate speculation, with potentially adverse consequences for patient care. In order to help promote and control the stability, adequacy, and quality of capital investment in long-term care, an increasing number of states are using a fair-rental approach for calculating capital reimbursement. In this article we compare the fair-rental approach with traditional cost-based capital reimbursement in terms of administration and policy. We discuss issues of concern to the state (cost and reimbursement design options) and the investor (after-tax cash flows, rate of return, etc.). Our analysis suggests that fair-rental systems may be superior to traditional cost-based reimbursement in promoting and controlling industry stability, while at the same time providing an adequate return to investors, without incurring long-term increases in the costs of administering programs.
authors.affiliation: University of Colorado, Denver.
authors.forename: H
authors.initials: H
authors.lastname: Boerstler
authors.forename: T
authors.initials: T
authors.lastname: Carlough
authors.forename: R E
authors.initials: RE
authors.lastname: Schlenker
mesh_terms: D002201:Capital Expenditures / Q000331:legislation & jurisprudence*; D006801:Humans; D007449:Investments / Q000191:economics / Q000331:legislation & jurisprudence; D008484:Medicaid / Q000331:legislation & jurisprudence; D009735:Nursing Homes / Q000191:economics* / Q000331:legislation & jurisprudence; D011907:Rate Setting and Review / Q000331:legislation & jurisprudence; D012051:Reimbursement Mechanisms / Q000331:legislation & jurisprudence*; D013221:State Health Plans / Q000331:legislation & jurisprudence*; D014481:United States