State Programs Seen as ‘Building Blocks’ for Stronger Nursing Homes

State governments are finding new ways to make nursing homes better places to live and work. One major strategy is using value-based payment (VBP) incentives, which are extra money given to facilities that meet certain care goals. Experts are now calling this strategy a major building block for improving nursing home staffing and resident care.

States Leading the Way with Incentive Programs

Today, nine states have added value-based care programs to nursing homes. Four of them, Illinois, Maine, New Jersey, and Ohio, are using VBP incentives specifically to help with staffing improvements. These states reward nursing homes that hire more workers and offer better care by giving them higher Medicaid payments.

Jason Speaks, government relations director for LeadingAge Illinois, says VBP programs help nursing homes move away from a one-size-fits-all funding approach. "These programs drive quality and improve resident outcomes by creating work environments where staff are paid better and feel valued," he said.

Building Block Work: Using Data to Improve Staffing

To decide who gets the incentives, states use data from the Centers for Medicare & Medicaid Services (CMS). They look at things like:

• Nursing home staffing levels

• Resident health outcomes

• Performance on Five-Star Quality Ratings

• STRIVE (Staff Time and Resource Intensity Verification) measurements

Experts say using real data and getting support from state leaders are key building blocks to making VBP programs successful. Without strong data and leadership, these programs can’t deliver the changes residents and staff deserve.

Illinois Sets a Strong Example

Illinois is showing how building blocks work in VBP programs can be very effective. In 2022, the state passed reforms that gave nearly $350 million each year to long-term care facilities. Here’s how that money was used:

• $70 million in quarterly incentive payments for facilities that met staffing goals

• $100 million a year in extra payments for Certified Nursing Assistants (CNAs)

• More daily funding for nursing homes that hit or exceed their staffing targets (from $9 to $38.68 more per resident per day)

This approach helps nursing homes hire and keep good workers while giving residents better care.

What Other States Can Learn

The new brief by the National Academy for Health Policy suggests that other states should:

• Get support from lawmakers early.

• Make sure staffing data is current and accurate.

• Invest upfront in technology and training to track progress.

Jason Speaks adds that VBP programs create accountability. They ensure that nursing homes are not just homes for residents but also rewarding workplaces for caregivers.

"By aligning financial resources with quality improvement, VBP programs allow providers to invest more in staff development, training, and retention strategies," he said. This helps attract new talent and encourages experienced workers to stay longer.

Building Stronger Care with Better Staffing

Incentive-based payments are proving to be a powerful building block for better nursing home staffing and resident care. By rewarding quality work and investing in caregivers, states like Illinois are setting a model that could help improve nursing homes across the country.

As more states look at ways to improve their nursing homes, using building block work like value-based payments could be key to lasting change.