Q: How does payment in skilled nursing facilities influence quality?

A: SNF payment rates, in the long run, affect investments in resources, such as hiring highly qualified staff, rather than at the point of clinical decisions.

Q: How did the Balanced Budget Act of 1997 and the introduction of the Prospective Payment System affect quality in SNFs?

A: We saw a simultaneous large cut in average payments, with the goal of greater efficiency while maintaining quality and access for Medicare residents. Researchers looked at post-acute quality outcomes and didn't see much. So it's good, strategically, to maintain post-acute quality.   

Q: What does this mean for long-stay SNF residents?

A: After the PPS was implemented, SNFs saw more adverse outcomes with pressure sore rates and urinary tract infections. Facilities decreased licensed staffing in proportion with the level of Medicare residents in the facility.

Q: What should policymakers consider when making rate cuts?

A:  In the long run, we need to consider why cross-subsidization is necessary for SNFs with high numbers of Medicaid patients. Multiple payment systems within a facility leads to strange results.