Case-Mix Reimbursement for Nursing Homes: Objectives and Achievements

Six state Medicaid programs currently use case-mix reimbursement (CMR) systems to pay nursing homes. Quality of care is not decreased under these payment systems and may actually have increased in some instances, while access for heavy-care Medicaid patients appears to have improved. As for equity of payment, CMR methods when compared with others tend to redistribute funds more in accord with resident care needs. Not all of the six states have made cost containment an explicit objective, and program administration costs typically increase. Since CMR systems primarily affect relative payments, however, they can be shaped to achieve total program expenditure objectives.