Nursing Home Staffing Expenditures and Levels are Impaired by High Medicaid Payer-Mix

Objectives: Medicaid is the primary payer for most nursing home residents and reimburses below the cost of care, limiting the ability of nursing homes to increase staffing levels. This study examined the association of nursing staff levels and expenditures with Medicaid payer-mix and determined whether these associations varied across different ownership types. Design: Retrospective, cross-sectional analysis using 2023 Medicare Cost Reports and Payroll-Based Journal (PBJ) data for freestanding nursing homes. Setting and Participants: A nationally representative sample of 11,559 nursing homes was analyzed. Methods: Nursing homes were categorized into 5 groups based on Medicaid payer-mix (0%–50%, 51%–65%, 66%–75%, 76%–85%, and 86%+). We measured nursing staff levels and expenditures per resident day, and the proportion of revenue spent on nursing staff. Linear regression models were used to assess associations between Medicaid payer-mix and these outcomes, allowing effects to vary by ownership type. Results: Nursing staff levels decrease as Medicaid payer-mix increases, with total nursing staff hours per resident day declining from 4.08 in the lowest Medicaid group to 3.40 in the highest. Facilities with a higher Medicaid payer-mix also have lower revenues and nursing staff expenditures per resident day but allocate a greater proportion of their revenue to staffing. For example, facilities with 86%+ Medicaid payer-mix spend 41.5% of their revenue on staffing, compared with 36.9% in facilities with less than 50% Medicaid days. Ownership type moderates these associations, with not-for-profits more sensitive to Medicaid payer-mix changes than for-profits. Conclusions and Implications: Nursing homes with a high Medicaid payer-mix face financial constraints that limit staffing levels despite allocating a larger share of revenue to staffing. As policymakers consider staffing mandates, they must address the adequacy of Medicaid reimbursement to support staffing and maintain quality of care.