Recent Trends in State Nursing Home Payment Policies

State Medicaid programs pay for a sizable portion of overall nursing home expenditures. The repeal of the Boren amendment in 1997 gave states greater freedom to set Medicaid nursing home policy. This study presents data from a comprehensive survey of state nursing home payment policies during 1999-2002. Aggregate inflation-adjusted Medicaid payment rates rose steadily, and there was no sizable increase in the adoption of other cost-cutting policies. Although these findings can be interpreted with some optimism from a nursing home financing perspective, areas of concern remain for state nursing home policy during the next several years. (January 2004)