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Nursing Home Medicaid Funding Updates

Although firm implementation dates are not finalized, the Department of Health (DOH) is making progress on a number of provisions that impact Medicaid funding for nursing homes. DOH reported that staff have completed work on July 1, 2018 rates updating case mix and that assessment reimbursement add-ons in fee-for-service Medicaid have been updated to the 2016 reconciled amounts. The Department shared these and other updates during a meeting last week with LeadingAge NY and other associations. Highlights of the meeting are provided below.

Quality Pool Implementation and Rate Supplement

DOH has completed the impact calculations for the 2013 through 2016 Nursing Home Quality Initiative (NHQI) and is awaiting information from the cost reports that are due in July to complete the 2017 calculations. Rate adjustments for all five years are expected in the fall and will coincide with the payment of two years worth of rate supplements expected to total roughly 2 percent of a home’s Medicaid revenue. The rate supplement, which represents the reinvestment of the 0.6 percent un-reimbursable cash receipts assessment, is subject to federal approval, but DOH reports that they have conceptual agreement on their approach from the Centers for Medicare and Medicaid Services (CMS). All necessary federal approvals for NHQI have been received. By making both rate adjustments in the same Medicaid payment cycle, DOH expects to offset negative NHQI adjustments for homes facing negative adjustments against positive adjustments resulting from the distribution of $140 million in rate supplements. Reconciliation of quality pool adjustments reflected in past managed care rates and payment of the rate supplement on managed care volume will be done through fee-for-service rates.

Two Percent Penalty

DOH is working to implement the state budget provision that requires a 2 percent penalty on a home that was in the lowest NHQI quintile in the most recent year and in one of the lowest two quintiles in the previous year. It is likely that DOH will use 2016 and 2015 measurement years (2016 and 2017 payment years) to assess which homes would be impacted by the provision. There are roughly a hundred homes that would have their Medicaid rates reduced by 2 percent, although the legislation requires that the penalty be waived for homes in financial distress. While DOH is awaiting federal approval, it continues to discuss with key stakeholders how financial distress is to be defined and measured.

Medicaid Rate Update

DOH has updated Medicaid rates that become effective July 1, 2018 to reflect the case mix based on January 2018 MDS assessments. Rate sheets should be posted shortly, and the new rate should begin July 1st. The assessment reimbursement amounts billed in fee-for-service Medicaid have been updated to the 2016 reconciled per-day amounts retroactive to Jan. 1, 2018. The retroactive impact will be included as an adjustment to Medicaid payment cycle 2131, which has a check release date of July 11th. The January 2018 benchmark rates already contain the 2016 reconciled assessment reimbursement amounts.

CMI and MDS Audits

The enacted state budget requires DOH to achieve $15 million in savings related to case mix. DOH is having internal deliberations on possible approaches to reach the savings target and will convene a workgroup to help make final decisions. As a preliminary step, the Department is no longer announcing picture dates in advance and could not confirm that CMI would continue to be calculated using the picture date approach.

The Office of the Medicaid Inspector General (OMIG) has completed audits of the 2015 MDS assessments (associated with both January and July 2015 picture dates) and is in the process of issuing draft reports. OMIG audited approximately 200 homes. Homes selected had both their January and July MDS assessments audited, and it appears that roughly half of the audits resulted in findings. Once the draft reports are sent, homes will have 30 days to appeal, after which final audit reports will be issued. Homes without findings may have already received a summation letter. Once that is complete, DOH will remove any 5 percent constraints that had been applied to the July 2015 and January 2016 rates and make rate adjustments based on audit findings.

Nursing Home Benefit in MLTC

The State continues discussions with CMS regarding the shift of long term permanently placed nursing home residents from MLTC to fee-for-service and has submitted a Medicaid State Plan Amendment. No dates for the changes have been finalized. DOH has held two workgroup meetings which have featured robust discussions of the permanent placement process but not much headway in addressing implementation details. LeadingAge NY has communicated to DOH a number of administrative issues that should be addressed to allow the transition to occur without disrupting resident care or payment processes. Legislation that would allow DOH to establish a voluntary demonstration program that would continue MLTC-nursing home partnerships among those interested in doing so has been introduced but has not yet advanced.

Other Updates

Advanced Training Initiative (ATI) and CYNERGY funding has been distributed to MLTC plans, but DOH has instructed plans not to make any distributions until pending contract issues have been resolved. These appear to be CYNERGY-related, and we are urging DOH to allow ATI funds to flow. The most recent round of VAP recipients have received their award letters but not the awards themselves. There are no new developments on bed hold regulations as DOH reviews the many comments received. We will share more information on this and other topics as it becomes available.

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