Nursing Home Medicaid Rates Updated
The Department of Health (DOH) has issued updated Medicaid rate sheets for a number of rate periods and has scheduled associated payment adjustments. One is a capital update to the Jan. 1, 2022 rates and is accompanied by a Dear Administrator Letter (DAL) dated Aug. 25th (available here). The second announces the release of all remaining 5 percent case mix constraints for each rate period since 2017 as well as the annual recalculation of the existing 1.5 percent add-on that remained unchanged from the original November 2018 calculation. The DAL associated with those updates is dated Aug. 23rd and is available here.
Please note that each of these adjustments may be positive or negative depending on a facility’s circumstances. The case mix constraint release is not relevant to specialty rates. In addition, DOH has also announced (without a DAL) that it has, retroactive to April 1, 2022, incorporated the 1 percent increase to nursing home Medicaid operating rates that was enacted in this year’s State Budget.
January 2022 Capital Rate Update
Members may recall that due to capital calculation delays, DOH decided to update the January 2022 Medicaid rate in two waves. The first wave was an update to the operating portion of the rate, primarily incorporating case mix index (CMI) and minimum wage updates that were reflected in Medicaid payments released Aug. 3rd. The January 2022 capital rates are now complete and are posted on the Healthcare Financial Data Gateway section of the Health Commerce System (HCS), with payment adjustments scheduled to be made in Medicaid payment cycle #2350 (payments to be released Sept. 21st).
5 Percent CMI Constraint Release
DOH is releasing the 5 percent CMI constraints for all rate periods from 2017 through 2021 in a single transaction. Members may recall that up until the rate period starting July 2021, if a facility’s case mix increased or decreased by more than 5 percent relative to the prior six-month period, DOH would constrain the impact (positive or negative) to 5 percent by incorporating a temporary rate adjustment. That rate adjustment was a temporary part of the rate for six months and was updated when the CMI was updated for the next rate period (i.e., six months later). When Minimum Data Set (MDS) audits were completed for a rate period, those temporary constraints would be released and homes would see the positive or negative adjustment in a Medicaid payment. As the Office of the Medicaid Inspector General (OMIG) is just starting audits of 2018 assessments, these releases have been slow and gradual until this point.
With the change in CMI methodology, DOH discontinued the constraint starting with July 2021 rates. The Department recently decided to release the 5 percent constraint for ALL of the rate periods in one adjustment and is doing so now. For nursing homes as a group, this represents a net positive payment that will be beneficial. However, there are a fair number of homes that will see a net negative adjustment. We had asked DOH to evaluate the impact on these homes and consider strategies to assist them to navigate what could be a significant recoupment.
As with other Medicaid liabilities, DOH automatically sets the recoupment rate at 15 percent, but providers may request that the percentage be reduced. Please let us know if the reconciliation causes financial stress for your home. The DAL asks that questions regarding Medicaid liabilities, recoupments, the balance due, or requests to establish an alternative payment arrangement be directed to the AR Recovery Unit at BIMAMAIL@health.ny.gov.
Providers can gauge whether they have case mix constraint adjustments by reviewing line 15 of the first page of their rate sheet. Amounts showing as positive on this line are being recouped, and any amounts showing as negative on this line are being paid to the provider. (To fully audit the calculation, you would multiply the amount from line 15 by the number of Medicaid fee-for-service (FFS) days billed in the applicable six-month timeframe.) Please contact us if you need assistance or would like to discuss.
Update to the 1.5 Percent Add-on and 1 Percent Increase
Along with the release of the constraint, DOH is making annual updates to the 1.5 percent across-the-board add-on that began in November 2018. The add-on was originally calculated as 1.5 percent of the operating rate (i.e., exclusive of capital) in effect in November 2018 and had never been updated. DOH is recalculating the 1.5 percent amount annually (i.e., January 2019, January 2020, January 2021) based on the operating rates in effect at the start of each year. Please note that the update to the 2022 operating rate made earlier in the year and reflected in Aug. 3rd payments already updated the 1.5 percent add-on for 2022. Providers should find April 1, 2022 rate sheets incorporating the 1 percent increase to the operating Medicaid rate posted on the HCS. This update includes specialty rates. Please note that the increase does not apply to the capital component, just the operating component.
Payment adjustments reflecting the removal of the CMI constraints will be in Medicaid rate cycle #2349 (payments to be released on Sept. 14th). Payment updates to the 1.5 percent across-the-board add-on (calculated from all but the capital component of the rate) for 2019 through 2021 rate years are also expected in cycle #2349. The 1 percent increase to the Medicaid operating rate retroactive to April 1, 2022 is expected to be in Medicaid rate cycle #2350 (payments to be released Sept. 21st).
The rate sheets associated with all of the updates are now available.
Please let us know if you have questions, are concerned about the impact of the case mix constraint release, find discrepancies, or encounter difficulties accessing the updated rate sheets. Thank you.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841