title: The relationship of California's Medicaid reimbursement system to nurse staffing levels.
abstract: BACKGROUND
  Policy initiatives at the Federal and state level are aimed at increasing staffing in nursing homes. These include direct staffing standards, public reporting, and financial incentives.
  
  
  OBJECTIVE
  To examine the impact of California's Medicaid reimbursement for nursing homes which includes incentives directed at staffing.
  
  
  METHODS
  Two-stage limited-information maximum-likelihood regressions were used to model the relationship between staffing [registered nurses (RNs), licensed practical nurses, and certified nursing assistants hours per resident day] and the Medicaid payment rate, accounting for the specific structure of the payment system, endogeneity of payment and case-mix, and controlling for facility and market characteristics.
  
  
  METHODS
  A total of 927 California free-standing nursing homes in 2006.
  
  
  METHODS
  The model included facility characteristics (case-mix, size, ownership, and chain affiliation), market competition and excess demand, labor supply and wages, unemployment, and female employment. The instrumental variable for Medicaid reimbursement was the peer group payment rate for 7 geographical market areas, and the instrumental variables for resident case-mix were the average county revenues for professional therapy establishments and the percent of county population aged 65 and over.
  
  
  RESULTS
  Consistent with the rate incentives and rational expectation behavior, expected nursing home reimbursement rates in 2008 were associated with increased RN staffing levels in 2006 but had no relationship with licensed practical nurse and certified nursing assistant staffing. The effect was estimated at 2 minutes per $10 increase in rate.
  
  
  CONCLUSIONS
  The incentives in the Medicaid system impacted only RN staffing suggesting the need to improve the state's rate setting methodology.
authors.affiliation: Department of Medicine, Health Policy Research Institute, University of California, Irvine, CA 92697-5800, USA. dmukamel@uci.edu
authors.forename: Dana B
authors.initials: DB
authors.lastname: Mukamel
authors.forename: Taewoon
authors.initials: T
authors.lastname: Kang
authors.forename: Eric
authors.initials: E
authors.lastname: Collier
authors.forename: Charlene
authors.initials: C
authors.lastname: Harrington
mesh_terms: D002140:California; D003953:Diagnosis-Related Groups; D004465:Economic Competition / Q000706:statistics & numerical data; D006280:Health Workforce / Q000706:statistics & numerical data; D006707:Homes for the Aged / Q000706:statistics & numerical data; D006801:Humans; D008484:Medicaid / Q000706:statistics & numerical data*; D009735:Nursing Homes / Q000706:statistics & numerical data; D009740:Nursing Staff / Q000458:organization & administration / Q000706:statistics & numerical data*; D010067:Ownership / Q000706:statistics & numerical data; D011787:Quality of Health Care / Q000458:organization & administration / Q000706:statistics & numerical data; D014481:United States