Next Update to Nursing Home Rates Expected in June

LeadingAge NY, along with other associations, met with DOH last week to review Medicaid payment issues.  The 2011 cash receipts assessment reconciliation calculations that will provide a net payment of $14.5 million to providers are under review by the Division of the Budget (DOB) with payments or recoupments anticipated in May.  DOH expects to calculate the 2012 assessment reconciliation in the summer and submit rates for DOB review in August.       

The next case mix update will be the incorporation of the July 2013 roster case mix index (CMI) into Jan. 1 2014 Medicaid rates.  DOH hopes to make these rate adjustments in June.  DOH is also in the process of recalculating rates based on Office of Medicaid Inspector General (OMIG) MDS audits.  Once done, the five percent constraint will be lifted, the audit findings will be applied, and a new rate will be calculated.  Audited homes will receive an audit report. 

During state budget negotiations LeadingAge NY as well as other associations submitted a number of questions to DOH on proposals that would impact nursing homes.  Last week DOH provided responses to some of those questions.  DOH intends to meet with associations to review the enacted budget provisions in detail but the questions and answers (that remain relevant after the final budget agreement) listed below provide a preview.

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

-----------------------------------

From DOH:

QUESTIONS ON 2014-15 EXECUTIVE BUDGET NURSING HOME PROVISIONS

Rate protection under managed care (HMH Part C, Section 23)

1. There is no sunset date either in the provision or the effective date section. Is the time period still expected to be through 3/1/17 for the FIDA region and 1/1/18 for rest of state?

A:  DOH recognizes this and will evaluate this in future years.

2. Language says the rate paid will be what is payable under PHL subdivision 2808 (2-c). However, this subdivision relates only to the operating rate and does not include capital or the assessment add-on. The reference should be broadened to include those amounts as well.

A: While the language references 2808 (2-c), it is the departments intention to include the capital component as well as rate “add-ons”.

3. The language refers to the rates “as in effect at the time such services were provided”. We are concerned that this may mean that any retroactive changes to rates that would be authorized under current Public Health Law (e.g., case-mix adjustments, appeals, assessment reconciliations) would not be addressed by this provision. Please clarify.

 A: It is the department’s intention to update the rates for all retroactive rate adjustments.

4. Will the benchmark rate be based on the case-mix of the entire Medicaid population, both managed care and fee-for-service?

 A:  Yes, the benchmark will be determined as it is now at least for the transition period.

5. What was the intent behind excluding time-limited therapy services from this provision? Will other time-limited sub-acute care services also be excluded? If a recipient is admitted with the intent to provide time-limited therapy services, but must be retained as a long-term resident for whatever reason, will this provision apply to the ensuing long-term stay?

A:  The Transition policy applies to Custodial Stays only, Rehabilitative stays would not be subject to this provision. Once the Institutional Long Term Care eligibility has been determined this policy would apply.

6. What sort of rate protections are being offered under the FIDA demonstration for patients receiving post-acute services that would normally be covered by Medicare?

A: The purpose of the FIDA demonstration is to align the two payment streams (Medicare and Medicaid) through the managed care plan. At this time DOH cannot respond to rate protections built into the Medicare Premium.

Global cap shared savings

1. How would the dividend distribution be proportionally allocated between providers and plans, and in turn, how would dividend funds be allocated to individual providers and plans?

A:  The dividend distribution proposal allocates any available Medicaid savings under the Global Cap based on three years of expenditure data amongst providers and managed care plans.  Total Medicaid expenditures will be used for providers and administrative costs stemming from participation in the Medicaid program will be used for plans.  An allocation percentage will be calculated for each provider/plan as the proportion of provider/plan expenditures to the statewide total.  The allocation percentages will be applied to the amount identified as the dividend.  The dividend will be distributed through lump sum payments outside of the claiming system.

2. Is the three years of expenditure data being used to allocate payments based on a moving average, or to calculate an expenditure trend among providers and plans and/or by sector? Are there not limitations on the availability of robust encounter data for this time period for certain plan services?  

A:  The State would calculate new allocation percentages each year using a rolling average of expenditure data; dropping the earliest year and adding the most recent year.  A methodology will need to be determined for providers/plans that do not have three years of Medicaid experience.

3. Why is there no allocation of funds by provider sector for the moneys set aside for “assistance to financially distressed and critically needed providers”?

A:   The language was crafted to give the Department the flexibility to address specific allocations schedules.  Those determinations have not been made at this point and will likely vary over time.

4. What criteria would be used to define “financially distressed and critically needed”? Will it be consistent with the VAP definition? Would recipients of such funds be required to meet certain goals as they would be under a program like VAP?

A:  The criteria that will be used to define “financially distressed and critically needed” have not yet been determined.

Restoration of 2% cut

1. The language would sunset the 2% cut on 3/31/14 and allow alternative arrangements such as the 0.8% cash receipts assessment on nursing home services to continue. Since nursing homes were not subject to the 2% cut because there was agreement on an alternative arrangement, how would this provision result in any restoration to nursing homes? 

A:  The department is exploring options to restore the value of the 2% ATB cut.

Other budget questions

1. What is the total dollar amount of paid nursing home rate appeals so far in SFY 2013-14? Will the entire $80 million rate appeal cap allotment be spent in SFY 2013-14 if universal settlement payments cannot be made this fiscal year?

A:  $55M has been spent to date for fiscal year 13-14. Given that the fiscal year is coming to a close it is not anticipated that further appeal $ will be expended.