Nursing Homes With the Most Residents of Color Get the Worst Medicaid Rates — and New Research Links That Gap to Worse Care

Oxford, Ohio — The nursing homes that care for the highest share of Black, Indigenous and other residents of color are also the ones getting shortchanged the most by Medicaid, and new research suggests that gap is showing up in the quality of care those residents receive.

Researchers from Miami University of Ohio and the University of Massachusetts Boston presented the findings at the LeadingAge annual meeting this week. Their work builds on a landmark 2024 study that found states pay, on average, just 82 cents in Medicaid reimbursement for every dollar a facility spends on care. Overall, 92% of nursing homes receive Medicaid payments below their estimated costs, according to researchers John Bowblis and Marc Cohen.

The new analysis draws on records from nearly 1 million long-stay residents across roughly 9,500 homes, adjusting for age, diagnoses and clinical acuity so residents with similar care needs could be compared fairly.

The Pressure Injury Signal

One finding stood out. In facilities serving higher proportions of residents of color, high-risk pressure injuries were more prevalent — a difference of 1.7 percentage points before accounting for resident characteristics. Bowblis, a research fellow at Miami University’s Scripps Gerontology Center, noted that these injuries often require additional treatment, drive up hospitalizations, and expose operators to lawsuits.

The researchers did not find the same clear pattern for falls, incontinence, pain or antipsychotic use.

Staffing Gaps Track With Payment Rates

Staffing told a similar story. Before adjustments, homes with more residents of color had lower registered nurse, certified nurse aide and total staffing levels. After adjusting for facility and resident traits, most of those gaps narrowed — but RN staffing disparities remained.

Here’s where payment rates come in. When researchers split facilities by reimbursement level, staffing disparities persisted among homes receiving lower payment-to-cost ratios and largely disappeared in higher-payment categories. Higher payments relative to care costs were also associated with better quality ratings.

The argument, in short: when Medicaid rates fall below the cost of care, facilities have less to spend on hiring, retention and quality improvements — and the homes hit hardest are those relying most heavily on the program. Medicaid covers roughly two-thirds of nursing home residents nationally, and each state sets its own rates, so the squeeze varies widely across the country.

Advocates have tied the findings to the broader fight over chronic Medicaid underfunding in nursing homes, an issue that has moved to the center of long-term care policy debates in Washington.

The research team says more work is needed on payment adequacy itself — and on why RN staffing gaps endure even after adjustments. For homes serving the residents with the fewest alternatives, the stakes could not be higher.