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Minnesota nursing home payment program promotes quality

A one-of-a-kind Minnesota Department of Human Services (DHS) program that provides nursing homes additional payment for quality improvement projects shows promise for encouraging overall nursing home quality improvement, according to a study published recently in the journal Health Affairs.

Researchers analyzed the impact that the Performance-based Incentive Payment Program (PIPP) has had on care quality in participating nursing homes.

The only program of its kind in the nation, PIPP supports nursing homes, individually or in collaboration with other nursing homes, in taking initiative to identify their specific problems, using evidence-based solutions and evaluating outcomes.

Nursing homes have focused on appropriate use of psychotropic drugs, falls reduction, intense training and coaching in compassionate care, reduced incontinence, improved mobility, better skin care, fewer hospitalizations, increased discharges from facilities to community settings and more.

DHS has been moving increasingly towards making the quality of services provided a key element of its payments. In the last two years, DHS has used this strategy across the department, including its new Medicaid ACOs, long term care services and with child care providers. Nursing facility quality measures are available in the Minnesota Nursing Home Report Card.

The study looked at four rounds of PIPP funding from October 2007 to October 2010 for 66 projects at 174 facilities. Nursing facilities contract with DHS to earn time-limited performance incentive payments of up to 5 percent of their operating payment rate.

PIPP combines a $6.7 million state share of Medicaid with an equal federal match and private-pay nursing home resources for total funding of $18 million each year. Since it started in 2006, PIPP has supported 102 projects involving 225 facilities.

The study measured the quality of facilities participating in PIPP and non-participating facilities with a composite score representing multiple dimensions of clinical care.

While the facilities had similar scores initially, PIPP facilities exhibited a significant increase in quality after PIPP funding and continued to have significantly higher quality scores than facilities not in the program.

The study found that PIPP facilities not only progressed toward their PIPP performance targets but improved quality in areas outside the focus of their PIPP projects.

The study was sponsored by the federal Agency for Healthcare Research and Quality. It was conducted by professors and staff of the Indiana University Center for Aging Research, the Regenstrief Institute, Harvard Medical School, Purdue University, the University of Minnesota and the Minnesota Department of Human Services.