DOH Proposes Regulations Revising Case-Mix Approach

In the wake of a preliminary injunction issued by a State Supreme Court judge, the Department of Health (DOH) is continuing to pursue its preferred new approach for calculating Medicaid case-mix index (CMI) adjustments to nursing home rates. The Jan. 29, 2020 issue of the New York State Register memorializes DOH’s proposal to revise the CMI determination for the July 1, 2019 rates by using all Minimum Data Set (MDS) assessments of Medicaid residents for the period Aug. 8, 2018 – March 31, 2019, rather than the longstanding approach of a snapshot of the Medicaid residents on a given date.

On a parallel track, DOH has required facilities to certify roster submissions that would allow July 1, 2019 rates to be calculated on a snapshot basis and plans to recalculate July 1, 2019 rates using these data. When these rates are ready for payment, DOH plans to put facility Medicaid fee-for-service (FFS) payments back on the two-week lag.

The proposed regulation specifies that adjustments to the direct component of Medicaid rates for the July 1, 2019 rates would be based on Medicaid CMI data from Aug. 8, 2018 through March 31, 2019. For rate periods on and after Jan. 1, 2020, CMI adjustments would be made in January and July of each calendar year and be based on all MDS data for Medicaid residents from the prior six-month period. Under this methodology, facilities would no longer be required to submit census rosters, and the 5 percent cap on period-to-period changes in CMI would be repealed. The published notice indicates that DOH expects the gross Medicaid impact to nursing homes will be a $246 million reduction in payments.

On Nov. 7, 2019, Acting State Supreme Court Justice Kimberly O’Connor issued an order preventing DOH from implementing the CMI change envisioned by these proposed regulations. The order reads that “pending a final determination of this proceeding and action, [DOH is] enjoined from implementing the new case mix adjustment methodology [it] adopted effective July 1, 2019, and [is] directed to continue to use the method for calculating petitioners-plaintiffs' Medicaid reimbursement rates that was in effect as of June 30, 2019.” We are awaiting a decision in the underlying case. The Centers for Medicare and Medicaid Services (CMS) has not yet granted its approval of this change either, with action still pending on State Plan Amendment (SPA) 19–33 “Nursing Home Case Mix Adjustments.”

LeadingAge NY will be submitting formal comments on the proposed regulation, which are due March 30, 2020. We will continue to keep members updated.

Contact: Dan Heim, dheim@leadingageny.org, 518-867-8866