AHRQ Innovations Exchange
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Authorized in 2006 by the State legislature, Minnesota’s Performance-Based Incentive Program funds nursing home–initiated quality improvement projects for 1 to 3 years through increases of up to 5 percent in the operating per diem rate charged to Medicaid and private-pay residents. Funding decisions are made through a competitive bidding process administered annually by the Department of Human Services, with recommendations from a review committee. Program staff provide support to nursing homes during and after the application process. Nursing homes that do not achieve project-specific performance targets can lose up to 20 percent of the incentive payments. The program has engaged a high proportion of Minnesota nursing homes in quality improvement activities; meaningfully improved the quality of nursing home care; and had a positive impact on quality improvement processes, teamwork, and communication within nursing homes.
This article was originally published in AHRQ Innovations Exchange, April, 2014. It is in the public domain.
Cooke, Valerie; Arling, Greg; Lewis, T.; Abrahamson, Kathleen; Arling, Priscilla; Davila, H.; and Mueller, C., "State Uses Financial Incentives To Fund Nursing Home–Initiated Quality Improvement Projects Through Competitive Bidding Process, Leading to Better Care" (2014). Scholarship and Professional Work - Business. 223.