Policy Brief

Leveraging the HCAI Healthcare Payments Database

to Improve Nursing Home Value and Transparency in California

March 2024

Click here for complete Policy Brief

California’s Healthcare Payments Database (HPD) is one of the largest research databases of its kind, capturing medical claims and encounters, pharmacy claims, and dental claims, as well as patient and provider information. The June 2023 release of data on enrollment, medical procedures and pharmacy prescriptions comprised 6,075,893,321 records from 2018 through 2021 for over 35,000,000 individuals.

Developed by the California Department of Health Care Access and Information (HCAI), the goals of the HPD include increasing transparency about health care costs, utilization, quality, and equity; informing policy decisions; and supporting a sustainable health care system and more equitable access to affordable and quality health care for all.

The following CALTCM policy brief argues that the goals of the HPD and California’s Office of Health Care Affordability cannot be met without focusing attention on California’s nursing homes. There is a broader case to be made for focusing attention on the health care and health status of California’s total older adult population, but the financial costs and quality variation in nursing homes provide compelling reasons for developing HCAI’s nursing home portfolio first.

The brief presumes some familiarity with nursing home payments and populations. The underlying issues are discussed at length in The National Imperative to Improve Nursing Home Quality, the most recent comprehensive report from the National Academies of Sciences, Engineering, and Medicine (NASEM). Short-stay, post-acute residents are most often covered by Medicare Part A or Medicare Advantage. Long-stay, custodial residents are most often covered by Medi-Cal; their professional fees are most often paid by Medicare Part B, thus yielding the “Medi-Medi” or “duals” designation. Reimbursement for post-acute residents is considerably higher than Medi-Cal reimbursement for long-stay custodial residents, which can be lower than the nursing home’s average daily cost. While nursing facilities have always cared for residents with dementia and other cognitive impairments that may entail difficult behaviors, they have increasingly been asked to care for long-stay custodial residents with serious mental illness, substance use, and behavioral issues. These issues, together with racial/ethnic socioeconomic disparities, have led to de facto segregation across nursing homes. The NASEM report points out that this segregation contributes to poorer outcomes.

Regardless of the challenges, some nursing homes perform better than others. Datasets from the Centers for Medicare and Medicaid (CMS) are invaluable but incomplete. Leveraging HCAI’s datasets – and in particular, the unparalleled richness of Healthcare Payments Database – will help illuminate the variation in quality and the financial underpinnings of this variation. HCAI’s nursing home portfolio should begin by addressing the lacunae left by CMS:

• Who goes into which nursing homes?
• Who are the physicians, nurse practitioners, and physician assistants delivering the professional care? Who are the medical directors?
• What is the reach of behavioral health practitioners?
• How is variation in quality outcomes tied to variation in these determinants?