Maximizing federal medicaid dollars: nursing home provider tax adoption, 2000-2004

Edward Alan Miller, Lili Wang

    Research output: Contribution to journalArticlepeer-review

    8 Scopus citations

    Abstract

    Since Medicaid is jointly financed by the federal and state governments, state officials have sought to offset state expenditures by maximizing federal contributions. One such strategy is to adopt a provider tax, which enables states to collect revenues from providers; those revenues are then used to pay for services rendered to Medicaid recipients, thereby leveraging federal matching dollars without concomitant increases in state expenditures. The number of states adopting a nursing home tax increased from thirteen to thirty-one between 2000 and 2004. This study seeks to identify the factors that spurred the rapid increase in nursing home provider taxes following implementation of the Balanced Budget Act of 1997. Results indicate that states with more powerful nursing home lobbies, lower proportions of private pay nursing home residents, worse fiscal health, weaker fiscal capacity, broader Medicaid eligibility, and nursing home supply restrictions were more likely to adopt. This implies that state officials react rationally to prevailing fiscal and programmatic circumstances when formulating policy under Medicaid and that providers seek relief, in part, from the adverse fiscal consequences of federal policy changes by promoting policy change at the state level.

    Original languageEnglish (US)
    Pages (from-to)899-930
    Number of pages32
    JournalJournal of health politics, policy and law
    Volume34
    Issue number6
    DOIs
    StatePublished - Dec 2009

    ASJC Scopus subject areas

    • Health Policy

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