Medicaid Incentives Spread Person-Centered Care to Unlikely Adopters

CFAR | May 23, 2017 | by Geralyn Magan

Findings from a LeadingAge study suggest that a Medicaid pay-for-performance program in Kansas has succeeded in changing the profile of nursing homes adopting person-centered care.

Nursing homes adopting person-centered care are typically larger, nonprofit care settings that are affiliated with a life plan community, have a higher proportion of private-pay residents, and have fewer health-related survey deficiencies.

But findings from a study by LeadingAge suggest that a Medicaid pay-for-performance program in Kansas called PEAK 2.0 has succeeded in changing that profile.

The study’s findings were reported in a recent article published online by The Gerontologist. Dr. Linda Hermer, managing director of research and senior research scientist at LeadingAge, is lead author of the article. Dr. Robyn Stone, senior vice president for research, is a co-author.


Launched in 2012, Kansas PEAK 2.0 uses a substantial Medicaid pay-for-performance incentive to promote the thorough adoption of person-centered care in nursing homes statewide.

The PEAK 2.0 program consists of 3 core components:

  • Structured education: Homes with little or no experience with person-centered care spend their first year in the PEAK 2.0 program taking part in structured education and training. At the end of that first year, the nursing homes present an action plan detailing how they will adopt person-centered care in 1 of 4 program areas (Resident Choice, Homelike Environment, Empowering Employees, and Meaningful Life) over the following year. PEAK participants implement and sustain person-centered care in all program areas as they move through the program’s 5 levels.
  • Objective evaluation of progress. Staff members from Kansas State University’s Center on Aging evaluate each home’s progress in achieving the aims of its action plan.
  • An escalating financial incentive. Homes in the earliest levels of the PEAK 2.0 program receive an incentive of 50 cents per Medicaid resident per day. The incentive increases progressively up to $4 per Medicaid resident per day as homes implement person-centered care to a greater degree.


The number of Kansas nursing homes participating in PEAK 2.0 rose from 122 in 2012-2013 to 229 in 2015-2016. Researchers report that most early PEAK 2.0 participants displayed the characteristics of typical person-centered care adopters. But that had changed by 2015.

“In 2012–2013, joining homes were disproportionately not-for-profit and part of a (life plan community), with greater baseline quality of care,” write the authors. “By the 2015–2016 program year … the demographics of participating nursing homes came to resemble the demographics of state nursing homes overall.”

In 2015, for example, 54% of nongovernment-owned nursing homes in Kansas were for-profit. That year, 56% of nursing homes participating in PEAK 2.0 were also for-profit.


The study’s findings suggest that the Medicaid financial incentive offered by PEAK 2.0 contributed to the program’s spread to atypical adopters. This is a compelling finding, write the authors.

“Anecdotal evidence from the management at participating homes indicates that the financial incentive … is frequently one of the main reasons that (nursing homes) initially join, but other benefits associated with person-centered care adoption become more rewarding over time and make continued participation ‘worth it,’” they write. “Still, it is an open question whether widespread (person-centered care) adoption would occur without a substantial financial incentive.”

The authors conclude their article by suggesting that PEAK 2.0’s ability to attract atypical adopters “should encourage policy makers to consider similar value-based purchasing models in their states.”