Nursing Home Reimbursement Update
(May 14, 2024) On May 14th, LeadingAge NY and other associations representing nursing homes met with the Department of Health (DOH) on nursing home Medicaid rate issues. DOH provided an update to several initiatives, although no firm dates for rate issuance or adjustment were provided. The issues discussed are outlined below.
April 2024 Rate Increase. The State has not yet determined the methodology that will be used to distribute up to $285 million in nursing home funding included in the Fiscal Year (FY) 2025 State Budget. The funding is subject to the approval of the Centers for Medicare and Medicaid Services (CMS), and DOH is discussing the approach that will be used for distribution. We are urging the State to release the State share of the funding as soon as possible. DOH confirmed that the increase will encompass Adult Day Health Care (ADHC) programs as well.
January 2024 Medicaid Rate. Updates to the January 2024 Medicaid rates are in Executive review. Given that the State Budget has frozen case mix at the level reflected in July 2023 rates pending the implementation of a replacement acuity adjustment methodology, the updates to operating rates are limited to existing adjustments. These include minimum wage as well as an update to those prior year increases that are calculated as a percentage of the non-capital rate: the 1.5 percent increase in place since November 2018, the 1.0 percent increase effective April 2022, and the 6.5 percent increase effective April 2023. The update will also update the capital component based on capital costs reported in 2022. DOH indicated that most correction requests received as part of the capital preview process have been incorporated into the rates.
2022 NHQI. The 2022 Nursing Home Quality Initiative (NHQI) payments remain in Executive review. The associated payment adjustments, expected to range from 1.3 percent of annual Medicaid revenue for those in the best quintile, to -0.8 percent of Medicaid revenue for those in the bottom two quintiles, will be made once that process is complete. Members may verify their quintile assignment here.
Rate Appeals. The Department is close to submitting 2023 rate appeals for Executive review. DOH is poised for the next step in the appeals review exercise in which DOH requested providers to review appeals submitted for rate years 2009 through 2021.
July 2023 Benchmark Rates. DOH has resolved some outstanding issues with July rates, paving the way for the posting of July 2023 Medicaid benchmark rates. Note that benchmark rates include the full 2023 Medicaid rate increase of 7.5 percent (while the fee-for-service rates reflect a 6.5 percent increase pending CMS approval).
2022 CRA Reconciliation. DOH identified a data issue in the 2022 cash receipts assessment (CRA) reconciliation process for certain providers. DOH will implement a correction that will result in some modifications. Although fewer than 100 providers are expected to be impacted, the adjustment is likely to decrease the reconciled per-day amount for these providers. Communication is forthcoming, and we will notify members as soon as more information is available.
Replacement Case Mix System. DOH reported that the State has entered into a contract with a national firm to assist in the transition from Resource Utilization Groups (RUGs) to a Patient-Driven Payment Model (PDPM) approach to adjusting Medicaid rates for resident acuity. While no timeline for the transition is yet available, DOH again reassured us that the provider community would be included in the discussions and that they expect the process to go well. We continue to point out that a replacement methodology needs to be implemented accurately and quickly, especially given that providers have been under a case mix freeze since January.
Medicaid Cost Reports. DOH is working to finalize some changes to the 2023 Medicaid Residential Health Care Facility (RHCF) cost report. The expectation is that the cost report software will be posted in June, with reports due 60 days after that. No significant changes are expected.
MDS Audits. The Office of the Medicaid Inspector General (OMIG) has completed 2018 Minimum Data Set (MDS) audits in all regions and seems about halfway through the report issuance process. Once DOH receives the final reports for all audited homes, it will implement any needed 2018 rate changes for homes with findings. OMIG is moving toward 2019 MDS audits and has selected 250 homes for 2019 audit, with June targeted as the first batch of entrance conferences.
Outstanding State Plan Amendments. The Department indicated that outstanding questions have been addressed and the State is awaiting CMS action on the three pending Medicaid State Plan Amendments (SPAs) of greatest interest to nursing home providers that would facilitate outstanding payments: the remaining 1 percent rate increase effective April 2023, the federal share of 2023-24 CINERGY, and public nursing home Intergovernmental Transfer (IGT) payments for 2023-24.
Safe Staffing Funding. Although not handled by the Rate Setting Bureau and not part of the meeting discussions, we are aware that DOH is working to issue the federal share of safe staffing funding in June. Hospital-based homes just responded to a request for additional data. The Department intends to distribute the remaining $93 million in funding to eligible homes in one distribution covering both free-standing and hospital-based homes. Award amounts should be approximately what eligible homes received in State-share funding.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841