CMS Encourages States to Improve Nursing Home Quality Through Medicaid Reimbursement Changes

The Centers for Medicare and Medicaid Services (CMS) has issued an informational bulletin detailing actions that state Medicaid programs can take to promote better health outcomes for nursing home residents and improve staff pay, training, and retention. This initiative builds on President Biden's nursing home reform agenda announced earlier this year. To ensure that nursing homes are adequately resourced and staffed, CMS is urging states to tie Medicaid payments to quality measures that will improve the safety and quality of care.

Specifically, the informational bulletin encourages four types of strategies:

1. Using Provider Payment Structures to Encourage Quality of Care: CMS is urging states to design their provider payment structures to reward providers for implementing or performing highly on initiatives such as establishing a minimum nursing home staffing requirement, undertaking efforts to reduce resident room crowding, strengthening the Medicare Skilled Nursing Facility (SNF) Value-Based Purchasing (VBP) program, and reinforcing safeguards against unnecessary medications and treatments. The bulletin notes that states can implement Medicaid payment initiatives that adjust provider payment rates based on resident room occupancy or set a higher payment rate for Medicaid residents in a single-occupancy room.
2. Accountability in Nursing Facilities: CMS is encouraging states to use federal and state data to improve and better target oversight of facilities. It notes that states may also develop incentives to encourage provider participation in Medicaid-specific quality improvement activities based on state-developed program goals. New York is already engaged in similar activities through its Nursing Home Quality Initiative.
3. Supporting High-Quality Staffing: The bulletin supports leveraging payment approaches to strengthen staffing, noting that such strategies complement the minimum staffing requirements for nursing homes that CMS plans to propose within a year. CMS advises states to develop long-range solutions for training and improving staffing and workforce sustainability in nursing facilities. It urges states to identify state-specific data sources for measurable metrics by which improvements can be monitored and incentivized.
4. Safety Issues During Emergencies and Pandemics: CMS also advises states to review their emergency preparedness policies and to build incentives in their provider licensure requirements or Medicaid payment structures to gather information and reward providers based on targets set by the state. CMS encourages states to submit State Plan Amendments (SPAs) aimed at ensuring preparedness in nursing facilities.

In addition, the bulletin notes that CMS continues to encourage states to achieve a more equitable balance between home and community-based settings and institutional care. The informational bulletin and accompanying announcement reinforced CMS's commitment to strengthening the availability of Medicaid-covered home and community-based services (HCBS) as an alternative to institutional care.

LeadingAge NY staff will be reaching out to New York State officials to develop strategies for improving Medicaid reimbursement of nursing home care in alignment with the bulletin.

Contact: Karen Lipson, klipson@leadingageny.org