Nursing Home CMI Workgroup Meets

Despite widespread concerns expressed by most members of the Nursing Home Acuity Workgroup, the Department of Health (DOH) continues to move toward finalizing July 2019 rates based on an alternative methodology for determining case-mix. In place of the traditional “picture date” methodology, DOH will calculate the case-mix index (CMI) used to adjust July 2019 rates by averaging all Minimum Data Set (MDS) assessments submitted during the period Aug. 8, 2018 through March 31, 2019. An MDS filed during that period will be used in the calculation whether the resident remains in the home or is discharged. DOH will only use MDS assessments showing Medicaid as the payer (including Medicaid-pending and Medicaid managed care) and only those that collect sufficient information to allow a RUG category to be assigned.

This is the second meeting of the workgroup that was authorized by the 2019-20 State Budget and tasked with making recommendations on the methodology utilized to calculate case-mix adjustments to nursing home rates by the end of June. While open to discussing CMI calculations going forward, DOH has stated that the July 2019 methodology has been determined and that they do not have the authority to modify it. Discussions have occurred with the Governor’s Office and the Division of the Budget (DOB), and additional ones are planned.

The financial plan reflects an administrative savings of $123 million to the State ($246 million total impact, inclusive of federal funds) during State Fiscal Year (SFY) 2019-20 from the change. We continue to be very concerned about the impact of this approach, especially the Department’s intent to use assessments from 2018 that were completed based on the understanding and operational practice of the previous CMI methodology. DOH indicated that they had not yet run nor analyzed facility impacts that would result from the new approach, although their expectation is to present draft rates for Executive review within two weeks. The Department was checking with counsel to determine how much information they could share in response to the workgroup’s request to review the data on which the State’s analysis and July rates are to be based.

DOH oriented the meeting toward a discussion of considerations for 2020 and beyond by focusing on practices in other states, asking how the move to the Patient-Driven Payment Model (PDPM) at the federal level may impact current practice, and requesting input on how CMI adjustment could be made more accurate. Workgroup member comments and recommendations included the following:

New York is unique in using 53 RUG-III groups to adjust Medicaid rates for acuity;
Several other states utilize modified RUG-IV groupers, some with quarterly picture dates;
When governments move to a new system, it is done prospectively with appropriate time to prepare;
PDPM relies on validated resident acuity indicators and therefore produces different results from service delivery indicators used by RUG-III;
A number of states rely on day-weighting (i.e., taking into account the number of days associated with an assessment), and many use an outside contractor to develop and/or manage the system;
It makes sense to align Medicare and Medicaid assessment practices where possible;
The State should be cautious in applying a PDPM system designed for a sub-acute population to measure the acuity of a long term care population;
Any new system should be prospective to minimize rate update delays and the need for managed care reconciliation;
Changing groupers or moving to a new system requires prices to be recalculated or rebased; and
A two-step process may be required where the first step may be to shift to quarterly collections, and the second step would be to shift to a different grouper.

Workgroup members also articulated a number of practical concerns regarding July 2019 rates, including the need for homes to be able to validate information such as payer and add-on data before rates are finalized. The workgroup has selected a small group of participants, including LeadingAge NY, to compile and hone the recommendations that the workgroup will present to DOH.

Along with participating in the workgroup discussions, LeadingAge NY has had discussions with senior administration officials and has joined with other groups to express our concerns about the devastating financial impact of the intended July methodology to policymakers in writing. Some additional information on these efforts is available here, and a summary of the first workgroup meeting is here.

We urge members who are able to query their MDS data systems to estimate their Medicaid CMI under the July methodology. Providers can do so by obtaining a listing, by RUG-III, of all MDS assessments with Assessment Reference Dates (ARDs) between Aug. 8, 2018 and March 31, 2019 that indicate Medicaid as the payer and that collect sufficient information to yield a RUG assignment. Please share the results of your analysis and contact us if you have questions.

LeadingAge NY Contacts: Dan Heim, dheim@leadingageny.org, 518-867-8383 or Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841