DOH Provides Nursing Home Funding Update

The Department of Health (DOH) is finalizing the methodology for retroactive Nursing Home Quality Initiative (NHQI) rate adjustments as well as the 1 percent rate supplement and hopes to have all necessary approvals in place to make payments in early fall. DOH provided updates on this and other nursing home Medicaid funding issues in a meeting with LeadingAge NY and other associations last week. Highlights of the discussion are presented below.

NHQI

DOH staff is completing impact calculations for five years of NHQI. Rate adjustments date back to 2013, and federal approvals are in place through 2017. Rate adjustments are calculated for each year using that year’s facility-specific Medicaid revenue and Medicaid days, both fee-for-service (FFS) and managed care. For each year, homes scoring in the top two quintiles receive a net positive adjustment, those in the bottom two quintiles receive a negative adjustment, and those in the middle quintile see a slight net positive amount. DOH intends to make rate adjustments back to 2013 in a single, lump sum adjustment in the fall of 2018.

While no NHQI adjustments were incorporated in FFS rates, a preliminary 2014 adjustment was included in 2015-2017 managed care benchmark rates. We have urged DOH to reconcile these placeholder amounts to actual adjustment amounts through FFS and are pleased that the Department is taking this approach. The calculations are inclusive of both FFS and managed care days but will be done through FFS. Adjustment amounts shown on benchmark rate lists will be multiplied by the corresponding year’s Medicaid managed care days and the amounts netted against the retro adjustment amount.

While final decisions may impact the timing, at this point DOH intends to make retroactive adjustments in the early fall. The 2018 rates, both FFS and managed care benchmark rates, will contain no quality pool adjustment or placeholder. Rather, DOH will calculate and make rate adjustments retroactive to Jan. 1, 2018 late in the year.

One Percent Rate Supplement

DOH reports that it has reached conceptual agreement with the Centers for Medicare and Medicaid Services (CMS) on making these payments and is now in the process of memorializing the methodology in a formal Medicaid State Plan Amendment (SPA). Although DOH submitted a SPA for the rate supplement several years ago, they are required to file one reflecting the payment methodology.

The rate supplements date back to 2014, and the State intends to pay two years of the supplement in each of the next four state fiscal years (SFY). This means that in 2018-19 and each of the three subsequent SFYs, nursing home rates will be supplemented by a total of $140 million, equaling in aggregate what homes have continued to pay after the associated Medicaid cut was repealed for all other Medicaid providers.

DOH intends to coincide NHQI rate adjustments with payment of the 1 percent rate supplement to help ensure that Medicaid funding for homes facing a large negative NHQI retro adjustment is not disrupted too severely. The allocation to each home will be calculated by multiplying their Medicaid rate by their Medicaid days (FFS and managed care), computing the percent share of total Medicaid funding each home receives, and applying that percent share to the $140 million distribution.

DOH is optimistic that they will receive the needed approvals, including those from CMS and the State Division of the Budget (DOB), to make payments in early fall.

FFS Medicaid for Permanent Nursing Home Residents

Providers and plans should wait for DOH guidance prior to making any changes related to the budget provision that authorizes FFS Medicaid reimbursement for permanent nursing home residents after three months of Managed Long Term Care (MLTC) enrollment.

The enacted budget limits Single Capitated MLTC Plan enrollment to three months for permanent nursing home residents. This change does not impact Programs of All-Inclusive Care for the Elderly (PACE), Fully Integrated Duals Advantage (FIDA), Medicaid Advantage Plus (MAP), or Mainstream Medicaid Managed Care. DOH envisions implementing the transition in a three-prong approach, subject to CMS approvals:

Starting on a date to be announced by DOH, dually eligible Medicaid beneficiaries who are not enrolled in MLTC and who are “permanently placed” will not be required to enroll into MLTC and will be covered by FFS Medicaid from the start;
Medicaid beneficiaries who are enrolled in MLTC and permanently entering a nursing home will remain enrolled in MLTC for the first three months, then disenroll and revert to FFS;
Those enrolled in MLTC who were permanently placed prior to April 1, 2018 will revert to FFS beginning in July 2018, pending approval of the technical amendment to the 1115 Medicaid Waiver that the State has submitted to CMS. DOH expects such transfers to begin in July, but to possibly be staged over the course of several months.

The change would not alter the MLTC nursing home benefit for temporary nursing home stays or the need for providers and plans to assist residents desiring to return to the community to do so. DOH has reactivated the advisory group that was convened to guide the transition of the nursing home benefit into managed care, and meetings to discuss the details of the transition have begun. LeadingAge NY is represented on the group, and we invite members to share any concerns about the transition so that they can be addressed as quickly as possible.

Other Issues

Homes eligible for Advanced Training Initiative (ATI) funding will have the funds passed through to them as a lump sum by an MLTC plan with which the home contracts. Plans have until mid-June to distribute the funding.

DOH is reviewing the many comments they received on the proposed open-ended bed hold regulations that would require homes to hold a resident’s bed during a hospitalization with no reimbursement, rather than offer the next available bed. The Department will be holding internal deliberations as well as discussions with legal staff and the Executive Chamber prior to making final determinations.

Finally, DOH is in the process of submitting the required SPA to facilitate the implementation of a 2 percent Medicaid rate penalty for homes with the lowest NHQI scores that was enacted in the state budget. The penalty is waived for homes deemed to be in “financial distress,” and DOH is in the process of working with associations to arrive at a definition.

Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841