Adequate Medicaid Reimbursement


Providers of long-term services and supports (LTSS) cannot ensure high-quality services without sufficient funding. Research suggests that higher Medicaid reimbursement is associated with better care. However, providers should be required to demonstrate that reimbursement increases intended to improve the quality of LTSS achieve this goal. 

Many states use LTSS payment systems that link payment levels to participant needs—either case-mix adjusted or tiered rates. These payment approaches ensure that nursing facilities and assisted living providers will accept and continue providing sufficient services to residents with substantial care needs. 



Adequate reimbursement

Federal and state governments should ensure that Medicaid reimbursement is sufficient to guarantee access to the full range of high-quality long-term services and supports in all service settings. Medically necessary services must not be capped. 

Reimbursement should be adjusted to account for the different types and amount of services that people with varying health conditions and levels of disability need. Medicaid reimbursement should be sufficient to ensure a viable, reasonable choice of services, settings, and providers, including home- and community-based services and a participant direction option with necessary supports. 

States should use prospective case-mix reimbursement rates, tiered rates, and other methods that link payment to the intensity of services provided. The rates should be adequate to encourage providers to serve all individuals, particularly those with heavy care needs.