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Reinventing Long-Term Care: The Effect of Policy Changes on Trends in Nursing Home Reimbursement and Resident Characteristics—Florida, 1989–1997

Correspondence: Address correspondence to Debra Street, Pepper Institute on Aging and Public Policy, Florida State University, Tallahassee, FL 32306-1121. E-mail: dstreet{at}garnet.acns.fsu.edu

Purpose: This study investigated how changes in Medicare and Medicaid policies affected skilled nursing facility (SNF) revenue streams and resident characteristics in Florida during the 1990s. Design and Methods: We used a series of ordinary least squares (OLS) regression models to analyze state-provided administrative data and Online Survey Certification and Reporting (OSCAR) data for all Florida SNFs. Results: We found that Florida SNFs responded differently to the growing gap in reimbursement between Medicaid and other payers, depending on their profit status. As the reimbursement gap grew, for-profit SNFs maximized their revenues by admitting fewer Medicaid paying residents, whereas nonprofit facilities increased their percentage of Medicaid admissions. Implications: Changes in patterns of reimbursement altered the composition of Florida SNF residents in terms of age, physical status, length of stay, and place of discharge.

Key Words: Medicaid long-term care • Medicare long-term care • Skilled nursing facilities