This article describes state Medicaid nursing facility reimbursement methods and rates in 1979-1997, using data derived from telephone surveys of state Medicaid reimbursement. The 1980s saw shifts toward prospective methodology. The late 1980s and early 1990s were characterized by adoption of casemix methods. The early 1990s also saw fewer changes in methodology with a hiatus in the mid-1990s followed recently by renewed changes to methodology. Medicaid per diem rates have increased faster than inflation but less rapidly than general health costs. The repeal of the Boren Amendment may now allow states to institute greater cost controls or moratoria on rate increases. Despite states' tendencies to follow one another's examples, Medicaid reimbursement remains diverse nationally, with wide differences in policies and rates.