Nursing Home Reimbursement Update

Nursing homes should expect updated Jan. 1, 2017 Medicaid rates reflecting the latest case mix figures and funding for minimum wage increases in mid-January, although some of those rates may still contain 2016 capital, with an update to 2017 capital coming a month or two into the year. Department of Health (DOH) staff shared this information and various other reimbursement updates with associations last week.

Capital Rates

DOH reported that they had received approximately 350 attestations by the Dec. 2, 2016, due date. Of these, 156 have been reviewed and approved, 40 have been rejected, and the rest are under review. To make sure all requests are appropriately reviewed without delaying capital updates for all homes, DOH is considering updating the capital for those homes that have finalized 2017 figures, but using the 2016 capital component as a placeholder for those not yet finalized. If that were the case, DOH would issue an updated capital schedule with 2017 capital for those homes within a month or two.

The state also announced that it would like to receive a capital attestation form from every home—whether a correction is needed or not—and will be sending clarification to this effect to providers shortly. To be accepted, all correction requests on an attestation must conform to capital setting policies and regulations. If any item does not, the entire attestation must be rejected. DOH has observed an increase in the number of requests that do not meet these criteria and has identified refinanced mortgages as a specific area of concern in capital attestations. To help alleviate this, an educational session to help clarify some of the observed problems is being considered.

In response to questions regarding rental reimbursement for off-site Adult Day Health Care Programs that have not received capital rates, DOH said that they were working to resolve this issue and hoped to have additional information within a month.

2017 Operating Rate and Minimum Wage

The Jan. 1, 2017 operating rate will reflect the most current (i.e., based on the July 2016 picture date) case mix for all but ten homes. Homes with case mix increases greater than 5 percent from the prior CMI collection period will have their CMI growth capped at 5 percent pending audit. The rates will also include minimum wage funding, fairly modest for most homes, based on data collected on the minimum wage survey conducted earlier this year. This amount will be itemized on the “miscellaneous” line of the rate sheet.

DOH anticipates requesting another round of surveys to better gauge the need for minimum wage funding going forward and will require supplemental cost reporting to allow the state to monitor and ensure that minimum wage funding is being used as required. The minimum wage workgroup will reconvene in January to finalize these issues.

Refinancing Shared Savings

The Centers for Medicare and Medicaid Services (CMS) approved the State Plan Amendment (SPA) to allow the state to share savings realized from refinanced mortgages with providers effective April 23, 2015. DOH is working to implement the provision and expects to keep the savings calculation straightforward by comparing real costs and expenses of the old mortgage to those of the new mortgage.

Case Mix and MDS Audits

Final audit reports have been issued. Any related rate adjustments have been made to 7/1/12 and 1/1/13 Medicaid rates, and updated rate sheets have been posted. Rates reflecting any audit findings as well as the release of the 5 percent CMI constraint to 7/1/13 and 1/1/14 rates have been finalized and are currently under review by the Division of the Budget (DOB).

Though all but 10 homes will have their July 2016 MDS assessments reflected in the CMI update to their 1/1/17 rates, the roster collection process continues to be very work-intensive, with DOH staff making numerous facility contacts and multiple MDS data extractions to ensure all residents are properly matched with an MDS assessment. DOH has been discussing strategies to help expedite the process and is planning an educational webinar to present their approach to providers. The goal is to minimize delays in case mix updates by allowing the update to proceed for those homes with complete data, with a subsequent update for those that require troubleshooting.

A letter announcing the 2017 case mix picture dates and roster submission windows will be posted and distributed shortly. The picture dates remain the last Wednesday of January and July, with roster submissions required in April and October.

Assessment Reconciliation

The 2015 cash receipts assessment reconciliation calculations have been completed and are currently being reviewed by DOB with the expectation that rate adjustments be made in January. DOH reconfirmed that the assessment reimbursement per-day add-on used in 2017 will be based on the 2014 reconciled amount. DOH will monitor and update the assessment reimbursement add-on in subsequent years if needed. We pointed out that it would be important to update the add-on next year to reflect assessment paid on Universal Settlement funds in 2016.

Reinvestment of Additional Assessment

As the state awaits CMS approval to reinvest a portion of the supplemental assessment (i.e., 0.8 percent) to supplement the operating rate by 1 percent, DOH is working on regulations and has developed a methodology that would increase Medicaid rates by approximately $70 million annually retroactive to April 2014 by supplementing the direct and indirect components.

The carve-out of transportation from the rate has recently received federal approval, and regulations are being drafted. The original amount that was to be removed was $12 million, but it was reduced to roughly $7 million based on information provided by homes that identified reported transportation costs that should remain in the rate.

Nursing Home Quality Initiative (NHQI)

While rate adjustments based on NHQI results for payment years 2013, 2014, and 2015 continue to be on hold pending resolution of litigation challenging the NHQI, DOH has published regulations and has signaled to the courts that it would like the case expedited. The adjustment amounts for 2013 and 2014 are available in current and prior benchmark rate listings. We requested that the 2015 adjustment amounts be distributed and reflected in updated benchmark rates. The 2016 NHQI results are still being calculated, with score sheets expected within several weeks.

In light of the state’s interest in seeing value-based payment (VBP) arrangements develop between payers and providers, DOH indicated that they would take a more active role in distributing NHQI results to managed care plans.

Advanced Training Initiative

Advanced Training Initiative (ATI) payments will be submitted to DOB shortly and are on schedule to be made in January. Unlike last year, when the funding was released in two equal payments, the entire amount will be paid at once. DOH reports that all but seven homes that were eligible for ATI funds applied. Awards will be the same or slightly higher than the announced amount of $3.66 per Medicaid day. In response to questions, DOH clarified that homes receiving year one funding did not have to spend the entire amount by March 31, 2017, as long as the money was being used as required by the program.

Other Updates

The state is working with CMS to get as many outstanding State Plan Amendments (SPAs) cleared as possible prior to the change in administration. Discussions of the 2015 Upper Payment Limit (UPL) are going well, and DOH is hopeful that once CMS approves the UPL, approval of other SPAs will follow.

DOH noted that a check of 2014 cost reports indicated that $124 million in equity withdrawals was made without seeking DOH authorization. The requirement to seek DOH approval for such transactions, which include certain transfers not-for-profit homes may make, such as those from foundations, are provided in a 2009 Dear Administrator Letter (DAL) available here. The state will include a reminder of this requirement with the 2017 Rate DAL but has not yet decided whether and what type of sanctions may apply to these violations.

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