The Centers for Medicare and Medicaid Services (CMS) issued an informational bulletin to states today, encouraging states to re-evaluate Medicaid base rates and supplemental payments “to provide adequate, performance-driven nursing facility rates to achieve better healthcare outcomes and address longstanding inequities for Medicaid beneficiaries living in nursing facilities.” Read the bulletin here.

CMS urges a rebalancing of states’ long-term services and supports systems to achieve a more equitable balance in spending between home and community-based services and institutional care. According to CMS, nursing home Medicaid payment focus needs to “shift from volume to value” and CMS recommends that states consider value-based payments and incentives focused on improved performance on quality measures, hitting certain staffing bench-marks, room occupancy, and hitting state-level emergency preparedness targets. CMS also recommends building emergency preparedness targets into provider licensure agreements. CMS further recommends that states consider using increases in payment rates to support staffing, such as earmarking Medicaid increases for salary and benefits or CNA training.

Notably, the aim of the informational bulletin is to encourage states to make changes, but does not grant any additional authority or resources. Rather, CMS provides several examples of existing programs in different states across the country that other states might emulate.

LeadingAge supports increases in Medicaid nursing home rates and urges CMS to adequately fund quality care across the aging services continuum to provide essential services and service choice for all older adults.