Researchers: PPS led to lower staffing, more deficiencies

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The Medicare prospective payment system and associated rate cuts for skilled nursing facilities have negatively affected staffing and regulatory compliance, according to researchers. Professional staffing decreased and regulatory deficiencies increased with the onset of the prospective payment system, though the negative effects were slightly blunted by givebacks in the Balanced Budget Refinement Act (BBRA), which was passed three years later in 2000.

By studying federal nursing home reporting data, researchers found PPS pay levels led to a reduction of about 17% to 33% of professional hours of staffing per resident day, while BBRA led to a 4% to 7% increase. Correspondingly, deficiencies in Medicare facilities rose 12% after PPS was implemented but dropped 3% after BBRA went into effect.

The more Medicare residents in a facility, the more pronounced the negative effects were, except in facilities that had the highest percentages of Medicare residents, according to study co-author Dr. R. Tamara Konetzka, a post doctoral fellow in health economics at the University of Pennsylvania. She and colleagues used federal reporting data to compare staffing and deficiency data.

The study was partially funded by provider giant Beverly Enterprises Inc., and appears in the current issue of Health Services Research.