This study explores the burden placed on AIDS nursing facilities by the current Medicaid prospective payment system. Correlation and regression analyses were conducted for a single AIDS special care nursing facility to ascertain the relationships between facility expenditures (patient care, social services, and support services costs) and two cost allocation bases (patient days and the mix of patients diagnosed with the AIDS dementia complex [ADC patients]).

Changes in the mix of ADC patients are more strongly associated with changes in operating costs than are changes in patient days. As the ADC patient ratio increases, more patient care is required, with savings in social services costs only partially offsetting that increase. Thus, an influx in ADC patients will create net costs that are not fully funded by Medicaid. If alternative funding cannot be located, ADC patients may become disadvantaged in obtaining adequate medical care.