The Limits of Medicaid Reimbursement Incentives

Provider incentive payments in the Medicaid program have been in operation nationally since the early 1980s. Although initially indicating favorable results, recently the ability of such incentives to produce the desired action has been questioned. This study examined the Florida Medicaid AIDS Nursing Home Admission Incentive Program to determine the reasons behind the program's apparent inability to increase Medicaid-covered persons with AIDS (PWAs) admissions to nursing homes. A survey of 308 nursing homes in the 10 Florida counties with the highest cumulative AIDS cases in the state was conducted. The results reveal that (a) the level of incentive reimbursement received, (b) the financial classification of existing (non-AIDS) residents, and (c) the level of technological sophistication of the facility are all significantly related to the number of PWAs admitted. Based on these results, the author discusses implications for the future of Medicaid incentive programs for PWAs.