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Research Report

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Medicaid is the major purchaser of nursing home care in the United States. To ensure that providers behave appropriately, the federal and state governments have established an extensive set of regulations that nursing homes must comply with if they are to be reimbursed for patients insured by Medicaid. Consumers exert considerable influence here by focusing on regulations and enforcement of non-compliance.

States also seek to align providers’ interests with those of other interested parties through controls and incentives built into state reimbursement systems, including with respect to facility cost and quality, access to care, payment equity, service capacity, and budgetary control. Prevailing lack of consumer involvement in the development and implementation of state rate setting systems has the potential to result in the adoption of methodologies that favor industry and government interests at the expense of issues important to residents and their families. All stakeholders, including consumer advocates, must be at the table if truly informed reimbursement policy reform is to take place.

New York and Minnesota are two states where consumers have been successful in influencing the development and implementation of Medicaid nursing home reimbursement policy to better encourage access, care quality, and quality of life. To understand how consumers can acquire a seat at the table and be effective in influencing Medicaid nursing home reimbursement, 24 in-depth interviews were conducted with 27 individuals in these states, including state agency officials, state legislators and legislative staff, consumer advocates (including ombudsmen), union staff, and nursing home industry representatives. Pertinent documents were reviewed as well.


The purpose of this brief is to draw lessons from our case studies of New York and Minnesota to convince you, as a state policymaker, to reserve room “at the table” for consumers and their representatives when Medicaid nursing home reimbursement is being discussed, developed and implemented. This is important because reserving a place for consumers and their advocates will further the promulgation of reimbursement systems with attributes that more effectively promote the welfare of current and future nursing home residents and their families.



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