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Nursing Home Payment Adjustments Coming in Medicaid Cycle 2311

Most members should see significant, positive adjustments in Medicaid payment cycle 2311 (check date Dec. 6th, released Dec. 22nd-23rd). These represent: (1) supplemental payments that reinvest the proceeds of the 0.8 percent cash receipts assessment back into nursing homes; (2) payment adjustments based on Nursing Home Quality Initiative (NHQI) scores; and (3) the resolution of more than 4,000 capital appeals dating back to 2009. While the supplemental payments are all positive, the quality adjustments may be positive or negative based on a facility’s score. While most homes did not have outstanding appeals, those that did have an appeal or appeals processed may see positive or negative appeal adjustments.

This year, the Department of Health (DOH) is distributing a total of $280 million (M) statewide in supplemental payments, the NHQI redistributes $50M of existing Medicaid funding, and the processing of appeals provides a statewide, net positive impact of $35M. The Dear Administrator Letter (DAL) announcing the payments is available here. LeadingAge NY has been advocating in various ways for the release of the supplemental funding, and we are pleased that the full amount is being paid. The backup calculations for the payments and adjustments are available here (click on the “Nursing Home Quality Pool and 2% Supplemental Payment” heading).

Things to keep in mind:

  • NHQI Payment. The NHQI or “Quality Pool” represents a redistribution of $50M of Medicaid payments. Homes that score in the top two quintiles receive a positive adjustment, those in the third quintile receive a slight increase, while those in the bottom two quintiles experience a negative adjustment.
  • NHQI Timing. The NHQI scores are for the 2020 “payment year,” which are mostly based on 2019 measurements (i.e., prior to COVID-19 disruptions).
  • “Traditional” 1 Percent Supplemental. The “traditional” 1 percent supplemental payment this year totals $140M statewide: $70M for the current year, and $70M for a prior, “catch-up” year. This marks the final “catch-up” payment, so going forward, the distribution of the “traditional” portion of supplemental payments is expected to be $70M annually.
  • “NEW” 1 Percent Supplemental. Starting this year, the State is making an additional, “new” supplemental payment of $70M annually. These dollars were previously used to fund the Universal Settlement. The State is distributing this year’s $70M as well as the prior year’s undistributed $70M. Next year and going forward, this “new” portion of supplemental payments is expected to provide $70M annually.
  • Funding Source for Supplementals. The supplemental payments are generated by the un-reimbursable 0.8 percent cash receipts assessment. The dollars the State collects (approximately $70M per year) are federally matched and reinvested into nursing home funding. The total of the “traditional” and “new” supplemental payments this year is $280M (due to “catch-up” years). Next year and going forward, the funding is expected to be $140M annually.
  • Allocation of Supplemental Funding. The supplemental funding is distributed proportionately based on Medicaid revenue. It includes Medicaid managed care days and captures specialty unit revenue. DOH calculates it by multiplying the appropriate Medicaid rate by the corresponding Medicaid days. We recommend that members review the backup calculations to ensure that Medicaid revenue for their facility is reflected accurately.
  • Capital Appeals. Appeals for rate years 2009-2020 will be included in cycle 2311 as lump sum adjustments along with NHQI and supplemental payments. Both Medicaid fee-for-service (FFS) and managed care days will be included. 2021 capital rate appeal adjustments will be made through an eMedNY rate change in cycle 2312 and will include an update to posted 2021 benchmark rates.
  • Capital Appeal Documents. The applicable calculations, summaries of affected appeals, and rate sheets are available on the Health Commerce System (HCS). These files can be found on the Healthcare Financial Data Gateway, Nursing Homes, NH Rate Sheets 4/2009-Forward, Appeals Processed November 2021.
  • Additional Capital Appeals. While DOH staff processed a large number of appeals, they continue to work on some additional ones. When more are processed and hit the payment system, we will let members know.
  • Medicaid Liabilities. As with most positive Medicaid adjustments, the State is offsetting any outstanding Medicaid liabilities against payments. If the positive adjustments are not sufficient to cover negative adjustments related to NHQI and/or negative capital appeals, a liability will be issued for the net difference, which will be recouped from future claims commencing in cycle 2311.
  • Paper Checks. Providers that have a portion of their Medicaid cycle 2311 payment intercepted to satisfy a Medicaid liability will receive a paper check reflecting the offset. A letter will be sent to providers from eMedNY with the details of these transactions.

Please let us know if you have questions or encounter discrepancies. DOH is fielding questions on these payment adjustments at NFRATES@health.ny.gov (please include facility name and Operating Certificate number).

Contact: Ken Allison, kallison@leadingageny.org, 518-867-8820 or Darius Kirstein, dkirstein@leadingageny.org, 518-461-5993