Nursing Home Reimbursement Update
The Department of Health (DOH) has sent retroactive rate adjustments related to the Nursing Home Quality Initiative (NHQI) and 1 percent reimbursement supplement to the Division of the Budget (DOB) for review. Once approved, DOH will share information on the adjustment amounts with providers and forward the payment to eMedNY. Although still in need of approval from the Centers for Medicare and Medicaid Services (CMS), DOH is processing the 2 percent rate reduction for homes with low NHQI scores as well.
DOH provided these and other updates on nursing home Medicaid funding during a meeting last week with LeadingAge NY and other associations. Highlights from the meeting are provided below.
NHQI. DOH intends to make retroactive rate adjustments related to five years of NHQI (2013 through 2017) shortly after DOB approval. The transaction will reallocate $250 million, will be done in one lump sum, and will result in a net positive adjustment for some homes, negative for others. It will be timed to coincide with payment of the 1 percent supplement, which DOH will offset against NHQI liabilities. Upon DOB approval, DOH will issue a Dear Administrator Letter (DAL) outlining the adjustment and provide facility-specific adjustment amounts in advance of the payment cycle in which they will be reflected. The adjustments will reconcile any NHQI adjustments included in managed care benchmark rates but will be done entirely through fee-for-service Medicaid.
One Percent Supplement. The State has long pledged to reinvest proceeds from the non-reimbursable .8 percent cash receipts assessment into nursing home funding and is now implementing that intention. The assessment was put in place in lieu of a 2 percent cut on Medicaid providers. The cut was repealed in 2014, but homes continue to pay the assessment. The payments amount to $70 million annually. To reflect payments back to 2014, DOH will distribute $140 million in this and each of the next three state fiscal years. After that, payments will revert to $70 million per year. The funding will be distributed proportionally based on Medicaid revenue. Upon DOB approval, DOH will issue a DAL detailing the payments and provide facility-specific amounts in advance of the payment cycle in which they will be reflected. Medicaid managed care revenue will be reflected in the calculation, but funding will be made entirely through fee-for-service Medicaid.
Two Percent NHQI Penalty. The 2018-19 State Budget enacts a 2 percent penalty on homes that are in the lowest NHQI quintile in the most recent NHQI year and are also in the lowest two quintiles in the prior year. DOH will use 2016 and 2017 NHQI data to determine homes eligible for the penalty. DOH intends to implement the provision in reissued July 2018 Medicaid rates, reflecting a 2 percent reduction for affected homes. The 2019 penalty will be based on 2017 and 2018 NHQI results. The legislation requires the penalty to be waived for homes meeting the definition of financially distressed. DOH defines this as having reported a negative fund balance AND a negative operating margin in the most recent Medicaid cost report.
Transportation Carve-Out. With non-emergency medical transportation being billed directly by the State’s transportation broker, legislation was passed to carve out transportation from the Medicaid rate. Although originally scheduled for earlier implementation, DOH intends to reflect the carve-out in reissued July 2018 rates by reducing the direct base price. The reduction is expected to be $0.08 for freestanding homes with fewer than 300 beds and $0.18 for hospital-based and/or homes with 300+ beds. Because transportation is in the direct component, the final impact will vary from provider to provider based on wage and case mix adjustments.
Universal Settlement. The payment schedule for the fourth payment of the Universal Settlement was sent to DOB in early August. DOH anticipates approval shortly and expects the funding to be released to the Trustees in September. Outstanding Medicaid liabilities will be offset from the payments. Additionally, $10 million in special appeals funding for successful applicants will be included in the distribution.
Minimum Wage. As in previous years, providers will be required to complete a wage survey, which will be the basis of minimum wage funding for 2019. DOH is preparing to reconcile 2017 minimum wage funding and will issue information on that process shortly.
Case Mix. The Department is working with Deloitte, the State’s contract actuary, on analyzing case mix and developing possible alternative approaches for case mix adjustment. They are not ready to share findings yet but will convene a group when they are. While the methodology going forward is uncertain, what is certain is that the State will no longer announce case mix picture dates in advance.
The Office of the Medicaid Inspector General (OMIG) has issued all of the draft audit letters for 2015 and is in the process of finalizing them or addressing recipient concerns. DOH hopes to reissue rates reflecting audit results and removing the 5 percent case mix constraint this year.
Capital Rate Sheet Review. DOH expects to issue preview capital rate sheets based on a similar timeline as last year. Homes will have the opportunity to review the DOH capital calculation and submit a request for any necessary corrections. All homes will be required to submit attestations, whether requesting a correction or agreeing to the DOH calculation. In advance of the process, providers were asked to review and update the reimbursed mortgage and bond issuance information DOH has on file for their facility by Aug. 31st. The process for sharing savings with homes that enter into approved refinancing arrangements is in place, and DOH will be sending a letter on the program shortly.
Transition to FFS. While implementation dates of the state budget provision to limit Managed Long Term Care (MLTC) enrollment to three months for permanently placed nursing home residents are not final yet, DOH reports that they have submitted the waiver and that CMS has signaled their willingness to work quickly with the State on the issue. DOH is continuing to meet internally on preparing for the transition and has made revisions to relevant forms and notices that they expect to share at the next stakeholder workgroup.
Other. CMS has approved the Upper Payment Limit, and the Intergovernmental Transfer payment schedule for public homes has been submitted to DOB. The funding will be paid out in two equal payments in the fall of 2018 and spring of 2019. DOH expects to submit the 2017 cash receipts assessment reconciliation to DOB in September.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841