The Effect of Medicaid Managed Long-Term Services and Supports Spending on Nursing Home Care Quality in the United States.

Objectives: The number of US states operating Medicaid managed long-term services and supports (MLTSS) programs grew from 8 to 24 between 2004 and 2019, driven by the challenges of an aging population. Significant heterogeneity exists across states in program features, structure, and spending. This study examined whether spending dimensions, specifically capitation rates and market coverage rates (the proportion of Medicaid nursing home expenditures distributed through managed care), influence the quality of care in nursing homes within MLTSS states.

Design: Secondary analysis of data on MLTSS program spending constructed by the authors, merged with publicly available cross-sectional nursing home data from LTCFocus and the Centers for Medicare and Medicaid Services.

Setting and participants: The sample included 2169 nursing homes operating in 6 states (Arizona, Delaware, Florida, Iowa, New Jersey, and Tennessee) with mandatory and statewide MLTSS programs as of fiscal year 2019.

Methods: A multiple regression model was estimated to examine the relationship between nursing home quality outcomes and state-level spending measures, controlling for key nursing home, county, and state control measures. Sensitivity analyses included additional controls for metropolitan statistical area indicators and wage indices.

Results: Higher capitation rates consistently contributed to improved quality of care, as evidenced by increased staffing hours, lower proportions of long-stay residents with increased daily activity needs, loss of bladder control, and urinary tract infections. In contrast, the associations between coverage rates and care quality measures remained inconclusive.

Conclusions and implications: This study highlights how capitation rates positively influence care quality in nursing homes within the MLTSS context. The findings provide valuable insights for policymakers, health care administrators, and managed care organizations seeking to optimize care quality in MLTSS programs.