Medicaid in Residential Care. Medicaid vs. Non-Medicaid Facilities

09/01/2013

Medicaid facilities are roughly similar to non-Medicaid facilities on many characteristics, with a few important exceptions. Medicaid facilities are smaller than non-Medicaid facilities, and a higher proportion of Medicaid than non-Medicaid residents live in facilities with 4-25 beds. Only about a fifth of RCFs nationally reportedly have a dementia or Alzheimer's special care unit or only serve residents with Alzheimer's disease; however, a higher proportion of these are non-Medicaid than Medicaid facilities, reflecting the younger age of Medicaid residents who are less likely to have dementia.

An important difference between Medicaid and non-Medicaid-participating facilities is that the living quarters of Medicaid facilities offer less privacy than non-Medicaid facilities. A large majority of the living quarters in non-Medicaid facilities (82.8 percent) are apartments or rooms designed for one person compared to about three-quarters of the units in Medicaid facilities (76.3 percent). Even with this differential, most of the units in Medicaid facilities are designed for one person. The difference in living arrangements at the resident level is larger. Although 77.5 percent of non-Medicaid residents live in apartments or rooms designed for one person, 54.5 percent of Medicaid residents live in that type of setting.

Whether a Medicaid-eligible individual is served in a nursing home or an RCF depends on a complex interplay of the supply of nursing home beds and occupancy rates, a state's nursing home level of care criteria, and whether RCFs can admit or retain people who need a nursing home level of care. Analyses show that the admission and discharge policies are largely the same for Medicaid and non-Medicaid facilities. Nevertheless, a larger proportion of non-Medicaid RCFs admit residents who are unable to leave the facility in an emergency without help, are regularly incontinent, and have moderate to severe cognitive impairment. Conversely, however, a higher proportion of Medicaid facilities admit individuals who need skilled nursing care or have substance abuse problems. Comparing the admission policies for facilities in which the Medicaid and non-Medicaid residents live, we found that the admission policies are comparable and several differences noted at the facility level are no longer statistically significant.

Medicaid and non-Medicaid facilities differ on a few discharge policies, most notably their willingness to retain residents who require skilled care. Although most facilities discharge residents who need skilled nursing care, a significantly larger proportion of non-Medicaid RCFs do so. In contrast, a larger proportion of Medicaid facilities discharge residents who are regularly incontinent of urine or feces or who need end-of-life care. Discharge policies are primarily the same for the facilities where Medicaid and non-Medicaid residents live, and differences are not large.

In services and staffing, Medicaid facilities appear to be similar to non-Medicaid facilities, but again there are a few exceptions. More Medicaid facilities offer services aimed at a younger population, such as transportation to sheltered workshops and educational programs, social services counseling, and case management services. Further, more Medicaid facilities provide skilled nursing services and daily health monitoring, perhaps reflecting that some states allow facilities to serve residents who require nursing home levels of care under Medicaid HCBS waivers.

Service use by Medicaid and non-Medicaid residents is about the same with regard to assistance with ADLs, incontinence care, and social and recreational activities inside and outside the facilities, but more Medicaid residents use other services (i.e., skilled nursing; special diets; basic health monitoring; transportation to medical appointments, stores, and elsewhere; and social service counseling). The low percentages for use of skilled nursing services are likely the result of two factors. First, small facilities (4-10 beds) account for 50 percent of RCFs and cannot afford having skilled personnel on staff. In addition, many RCFs are not permitted by state regulation to serve individuals who need nursing care on a regular basis. Of note, although staffing ratios in Medicaid and non-Medicaid facilities are not different when facilities are the unit of analysis, the number of direct care hours per resident in facilities where Medicaid residents live is higher than in the facilities where non-Medicaid residents live, although the difference is not large.

It is not clear what accounts for the difference in the base rate that Medicaid and non-Medicaid facilities charge, but the higher costs in the non-Medicaid facilities may be to provide additional amenities or to cover higher staff wages. Although more extensive analyses are needed to definitively answer the question, higher staffing and offering more services do not appear to be the reasons for the higher charges in non-Medicaid facilities. Medicaid RCFs may be in older buildings, while non-Medicaid RCFs may be in newer, more expensive purpose-built buildings.

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