Higher Medicaid Payment-to-Cost Ratios May Improve Disparities in Access to Alzheimer Special Care Units

The likelihood of a nursing home having an Alzheimer disease special care unit is significantly lower when there is a higher percentage of Black or Hispanic residents, a new study published in JAMA Network Open reported.¹

Medicaid payment-to-cost ratios may be increasing racial disparities in access to Alzehimer special care units in nursing homes. | Image Credit: LIGHTFIELD STUDIOS - AdobeStock_303534362.jpeg

Alzheimer disease special care units (ASCUs) are designated areas within nursing homes to address patients with dementia, often with open floor plans to accommodate adverse behaviors associated with dementia, like wandering, and trained staff to prevent or reduce said behaviors.² As of 2022, it was estimated that nearly 6.5 million Americans over the age of 65 live with Alzheimer dementia, incurring an estimated $321 billion in long-term care and hospice services.³ The new study determined that Medicaid payments were associated with racial disparities in the availability of ASCUs. And for every 1% increase in the percentage of Black residents, researchers found a 0.1% decrease in the probability of a nursing home having an ASCU available.¹

ASCUs are associated with improved patient outcomes, and studies show that residents in ASCUs are less likely to be restrained, develop pressure ulcers, receive antipsychotic medication, or be hospitalized. Yet, researchers believe the benefits may not be equally distributed. When compared with White residents, Black and Hispanic residents are more likely to experience all the outcomes ASCUs have been shown to reduce. These differences can be associated with the availability of ASCUs, which were only available in about 13.6% of US nursing homes in 2019.¹ Furthermore, the authors of this study identified Medicaid as a key factor exacerbating lower-quality care and access to ASCUs, as Black and Hispanic residents are more likely to rely on Medicaid to pay for nursing home care as opposed to private insurance or out-of-pocket payments.

State Medicaid Payments May Influence ASCU Availability

The study used Certification and Survey Provider Enhanced Reporting (CASPER) data from 2009 to 2019, which provided nursing home characteristics, like the number of ASCU beds, and Medicaid and CHIP Payment and Access Commission (MACPAC) data estimated from 2019, which reported Medicaid base payment rates and acuity-adjusted costs for their analysis. Of the total number of nursing homes in the US (N = 14,058), 13,229 were used in the primary cohort. Hospital-affiliated facilities (n = 574) and those missing racial composition data (n = 17) were excluded, in addition to the District of Columbia for missing CASPER data and Alaska, Idaho, and New Hampshire for unavailable MACPAC data.

Of the 13,229 facilities used in the primary cohort, the majority were for-profit (72.3%) or part of a chain (58.8%). Medicaid payment rates and the cost of care for Medicaid residents varied by state, and the overall mean (SD) Medicaid payment-to-cost ratio among all states was .87 (0.13 [range, 0.58-1.29]). However, the association between the percentage of Black residents and the Medicaid payment-to-cost ratios was statistically significant.

In states with very constrained Medicaid payment-to-cost ratios (0.58-0.81), nursing homes with 4.3% to 15.2% of Black residents were 38% less likely to have an ASCU (OR, 0.62; 95% CI, 0.42-0.90), and nursing homes with 15.2% or more of Black residents were 68% less likely to have an ASCU (OR, 0.32; 95% CI, 0.21-0.50) when compared with nursing homes with less than 4.2% Black residents. In states with moderately constrained Medicaid payment-to-cost ratios (0.82-0.94), nursing homes with a higher percentage of Black residents were also less likely to have an ASCU (Q3: OR, 0.58; 95% CI, 0.48-0.72; Q4: OR, 0.55; 95% CI, 0.44-0.69). However, in states with the highest Medicaid payment-to-cost ratios (0.94-1.29), the percentage of Black residents was no longer associated with ASCUs (Q4: OR, 0.86; 95% CI, 0.53-1.40).

Moreover, the association between the percentage of Hispanic residents and Medicaid payment-to-cost ratios related to the availability of ASCUs was not significant.

“Our results suggest that nursing homes in states where Medicaid is more likely to cover the full cost of care have smaller racial and ethnic disparities in the availability of ASCUs than those in states where Medicaid payments cover the lowest proportion of care costs,” the study authors explained. “The costs in ASCUs are greater than for regular long-term care. In states with low Medicaid payment-to-cost ratios, admitting Medicaid residents could result in financial loss. Nursing homes may prefer to invest in ASCUs in areas where there are more private-pay residents, who are disproportionately White, thus contributing to the racial and ethnic disparity in the availability of ASCUs.”

The limitations of this study included self-reported national Minimum Data Set assessments and a one-question survey to collect the resident’s race; however, it did not account for ethnicity. Additionally, the beds in ASCUs were also self-reported by nursing homes, where regulations on criteria varied by state. The study authors also noted that facility-level Medicaid payment-to-cost ratios may have a stronger association with ASCU availability, as the Medicaid base rates used did not account for supplemental payments and other adjustments and may not reflect the actual mean costs of all residents from all payers included.

“Current federal regulations require states to ensure Medicaid payments are adequate to allow access for Medicaid residents equal to those with private pay, but they do not require that Medicaid payment rates cover the cost of care,” the study authors explained. “The fact that the likelihood of having ASCUs was lower in nursing homes with higher proportions of Black residents who rely more on Medicaid suggests that some states may need to increase Medicaid payment rates to comply with this standard.”

References

1. Xu H, Li S, Bowblis JR, Pappadis MR, Kuo YF, Goodwin JS. Medicaid payments and racial and ethnic disparities in Alzheimer disease special care units. JAMA Netw. Open. 2025;8(8): e2525057. doi:10.1001/jamanetworkopen.2025.25057

2. Kok JS, Berg IJ, Scherder EJ. Special care units and traditional care in dementia: relationship with behavior, cognition, functional status, and quality of life—a review. Dement Geriatr Cogn Dis Extra. 2013;3(1):360-375. doi:10.1159/000353441

3. 2022 Alzheimer's disease facts and figures. Alzheimers Dement. 2022;18(4):700-789. doi:10.1002/alz.12638