State Regulatory Enforcement and Nursing Home Termination from the Medicare and Medicaid Programs

Objectives: Nursing homes certified by the Medicare and/or Medicaid program are subject to federally mandated and state-enforced quality and safety standards. We examined the relationship between state quality enforcement and nursing home terminations from the two programs.

Study Design: Using data from a survey of state licensure and certification agencies and other secondary databases, we performed bivariate and multivariate analyses on the strength of state quality regulation in 2005, and nursing home voluntary terminations (decisions made by the facility) or involuntary terminations (imposed by the state) in 2006-2007.

Principal Findings: Involuntary terminations were rarely imposed by state regulators, while voluntary terminations were relatively more common (2.16 percent in 2006-2007) and varied considerably across states. After controlling for facility, market, and state covariates, nursing homes in states implementing stronger quality enforcement were more likely to voluntarily terminate from the Medicare and Medicaid programs (odds ratio = 1.53, p = .018).

Conclusions: Although involuntary nursing home terminations occurred rarely in most states, nursing homes in states with stronger quality regulations tend to voluntarily exit the publicly financed market. Because of the consequences of voluntary terminations on patient care and access, state regulators need to consider the effects of increased enforcement on both enhanced quality and the costs of termination.