DOH to Suspend Case Mix Adjustments, Freeze January 2024 Nursing Home Operating Rates
The Department of Health (DOH) rate-setting team has indicated that the State will freeze January 2024 operating rates, suspending case mix adjustments until it can implement a new case mix adjustment methodology similar to Medicare's Patient-Driven Payment Model (PDPM). The case mix adjustment in the January 2024 rate will be based on assessments with reference dates spanning April 1st through Sept. 30, 2023.
This move away from a Resource Utilization Group (RUG)-based case mix adjustment and the shift to a methodology more in line with the PDPM is driven by federal changes in the Minimum Data Set (MDS) that will be implemented on Oct. 1, 2023. Beginning in October, the Centers for Medicare and Medicaid Services (CMS) will provide limited support for RUG-based methodologies. While the State could have opted to continue using RUGs for some additional time by requiring providers to complete an additional Optional State Assessment (OSA), NY has decided instead to shift to a new case mix adjustment methodology. Because that shift requires time to implement, the Department will need to suspend case mix adjustments while it develops and adopts the new methodology.
While avoiding the additional administrative work on the part of nursing staff that an OSA would have required is a positive step, LeadingAge NY has stressed the need for a clear and predictable timeframe for the freeze and the implementation of the new methodology. If done well, the shift to a PDPM-like methodology offers an opportunity to better align payments with actual care costs and incentivize desired outcomes.
DOH emphasized that it is in the initial stages of planning a transition to a PDPM-like methodology. Key decisions are still under discussion, with little additional information available at this time. Given the complexity of implementing a new case mix methodology, LeadingAge NY has urged DOH to work with an experienced vendor and to make open, two-way communication with stakeholders a key component of the effort. We welcome member comments and will seek additional input as more information becomes available.
Contact: Karen Lipson, klipson@leadingageny.org, or Darius Kirstein, dkirstein@leadingageny.org