Objective. This study explored the effects of federal and state reimbursement mechanisms on occupational therapy practice in the nursing home setting, specifically, the selection and scheduling of patients for treatment programs, the content of the therapy provided, and the documentation requirements.

Method. A questionnaire developed for the study was mailed to the chief occupational therapist in each of the 171 nursing homes located in New York city. Descriptive data on the research variables were collected from 83 respondents.

Results. Government regulation and reimbursement mechanisms specifically affected therapists’ treatment decisions and patient programming and scheduling in the nursing home setting. Survey results described the clinical impact of the resource utilization groups (RUGs) data collection periods. Negative effects were seen in a substantial incidence of withholding therapies from patients and the decline in the use of some traditional occupational therapy treatments. Positive effects included an increase in staff and equipment and therapists’ improved documentation skills.

Conclusion. Occupational therapy practitioners in the nursing home setting need to find ways to live with the realities of government reimbursement without compromising professionalism or clinical judgment. Documentation is the key to assuring that patients receive the therapy they need. Therapists should be aware of the regulations, document accordingly, and review those cases that were denied reimbursement to learn of documentation errors.