Modeling the Impact of Declining Occupancy on Nursing Home Reimbursement

This paper models the effect of occupancy rates on nursing home reimbursement. It surveys nursing home methodologies generally and specifically models the rate setting systems of California, Indiana and Pennsylvania. The modeling indicates that much of “the fixed costs” would not get calculated back into the rates. The costs that do would be allocated across all resident days used in rate setting regardless of payer source, including Medicare and private pay, limiting the Medicaid impact.