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Nursing Home Reimbursement Update

The September meeting on nursing home Medicaid funding issues began with the introduction of Laura Rosenthal, the new Director of the Bureau of Long Term Care Reimbursement. She was most recently a Director in the New York State Office for People with Developmental Disabilities (OPWDD) and has a number of years of experience at the Division of the Budget (DOB). Steven Simmons, the prior Director, retired last summer.

At the meeting, attended by nursing home representatives, Department of Health (DOH) staff provided updates on key funding issues, reminded that the capital rate review process is about to begin, and unveiled the picture dates that will be used for calculating the case mix index (CMI) in the January 2019 rates. Highlights of the meeting discussions are provided below.

NHQI and 1 Percent Supplement. Both payment packages were recently approved by DOB (and previously by the Centers for Medicare and Medicaid Services (CMS)). However, DOH has identified a technical issue that they need to discuss with CMS that may result in a slight delay. When the issue is resolved and a Medicaid payment cycle is assigned, DOH will issue a Dear Administrator Letter (DAL) detailing the adjustments and provide facility-specific adjustment amounts. DOH expects that the check date will likely be in October.

The payment adjustments for five years of Nursing Home Quality Initiative (NHQI) will reallocate $250 million in one lump sum and will result in a net positive adjustment for some homes, negative for others. The adjustment will be made in the same Medicaid payment cycle as the 1 percent supplement, which will distribute $140 million. Additional background information on these adjustments is available in last month’s reimbursement update here.

2 Percent Quality Penalty. The revised July 2018 rate schedule reflecting the 2 percent penalty on affected homes is under review by DOB. It has received federal approval. DOH expects to reissue July 2018 rates for impacted homes in September. This stems from a 2018-19 State Budget provision that enacts a 2 percent penalty on homes that are in the lowest NHQI quintile in the most recent NHQI year and are also in the lowest two quintiles in the prior year. DOH will use 2016 and 2017 NHQI data to determine homes eligible for the penalty. The 2019 penalty will be based on 2017 and 2018 NHQI results. The legislation requires the penalty to be waived for homes meeting the definition of financially distressed. DOH defines this as having reported a negative fund balance AND a negative operating margin in the most recent Medicaid cost report. DOH will use 2017 cost reports to determine financial distress.

Transportation Carve-Out. The revised July 2018 rate schedule reflecting the carve-out of transportation costs from the Medicaid rate is under review at DOB. The provision has been approved by CMS, and DOH expects to reissue July 2018 rates in September. The carve-out is being done to implement a state budget provision that seeks to prevent duplicate payment because non-emergency medical transportation is now billed directly by the State’s transportation broker. The reduction is expected to be $0.08 for freestanding homes with fewer than 300 beds and $0.18 for hospital-based and/or homes with 300+ beds. Because transportation is in the direct component which is adjusted for wages and case mix, the final impact will vary from provider to provider.

Universal Settlement. The payment schedule for the fourth payment of the Universal Settlement was sent to DOB in early August. DOH anticipates approval shortly and expects the funding to be released to the Trustees in September or October. Outstanding Medicaid liabilities will be offset from the payments.

IGT. The rate setting bureau has forwarded the Intergovernmental Transfer (IGT) payment information for public homes to the Medicaid Financial Management unit, which will be sending notification letters to counties. The letters will instruct counties to claim half of their 2018-19 IGT allocation. The other half will be available in the spring of 2019. The overall IGT amount available based on the Upper Payment Limit calculation is higher this year than last year, so most recipients will receive a higher distribution.

Assessment Reconciliation. DOH has completed the calculations and will be sending the 2017 cash receipts assessment reconciliation schedule to DOB by the end of the month. The reconciliation is likely to be reflected in an October payment cycle, and back-up calculations will be posted in a single file on the DOH website, as was done last year. The file contains a revision form that should be used when requesting a correction to the assessment reconciliation. For 2019, DOH will update the per-day assessment reimbursement amount paid through eMedNY to the reconciled 2017 amount.

January Case Mix. Unlike previous years when the CMI reflected in January rates was calculated using MDS assessments associated with the last Wednesday of the prior July, the CMI in the Jan. 1, 2019 rate will be based on two picture dates: April 25th and July 25, 2018. DOH has not yet decided how data from the two dates will be blended. Homes will be required to upload census rosters for both picture dates during the same upload window starting Oct. 3rd. The look-back period for the April 25th picture date starts on Jan. 23rd, and the look-back period for the July 25th picture date starts on April 24th. The DAL outlining the dates and process is posted here.

Members should verify that every resident that will appear on the April 25th and July 25th census rosters has a complete and correct MDS assessment on file with CMS. DOH intends to download the MDS data from CMS on Sept. 28th, making it critical that this verification be done without delay to allow any required corrections to be filed with CMS by Sept. 27th. If DOH is not able to match a resident listed on the roster with an MDS assessment on file with CMS, that resident will default to the lowest RUG category and be counted as a Medicaid resident. Such defaults will result in a reduction in Medicaid reimbursement. DOH has indicated that staff will be less able to assist homes with troubleshooting matching problems than in the past.

OMIG Audits. The Office of the Medicaid Inspector General (OMIG) has issued all of the draft audit letters for 2015 and is in the process of addressing appeals and finalizing them. DOH hopes to reissue rates reflecting audit results and removing the 5 percent case mix constraint before the end of the year. OMIG has begun 2016 audits in the Buffalo area and will be moving east and south across the state. Homes selected for audit will have both 2016 picture date MDS submissions reviewed. DOH and OMIG recently issued audit guidance that is available here.

Capital Attestations. Providers should be on the lookout for the announcement that their preview capital rate sheets are available for review. DOH hopes to post these as early as this week. As in prior years, homes will have the opportunity to review the DOH capital calculation and submit a revised calculation with any necessary corrections. If the correction request appears to meet policy and regulatory requirements, DOH will incorporate the correction into the rate, which will be subject to OMIG audit. All homes will be required to submit attestations, whether requesting a correction or agreeing to the DOH calculation, and the attestations will cover all Medicaid rates, including specialty unit and Adult Day Health Care.

Minimum Wage Survey. Members should make every effort to complete and submit the minimum wage survey by the Fri., Sept. 21st due date. DOH reports that fewer than half of the state’s homes have responded so far. The survey collects wage and hour data for the period April 1, 2018 through June 30, 2018. Both direct and contract staff for which the organization is able to produce a payroll record should be included. The reported information will help the State make appropriate rate adjustments to reflect increases in the state's minimum wage in 2019 and more accurately plan for future year funding. A home’s incremental additional funding for 2019 will be added to the current amount shown on line 13 (“Misc. per diem adjustments”) of the Medicaid rate sheet. Providers who are not impacted by the increase in minimum wage or who choose to opt out of the full survey are requested to submit the survey but need only to complete questions 1 through 6. Failure to complete the survey may result in no minimum wage funding. The survey requires attestation by the organization's CEO or CFO. Additional information and links to the survey and accompanying letter are available here.

Transition to FFS. No transition dates are yet known, but DOH has submitted the necessary waiver to CMS and begun regular meetings with CMS staff to work toward quick approval. The State is working internally on a number of technical concerns that need to be addressed, and DOH has made revisions to relevant forms and notices that they expect to share at the next stakeholder workgroup meeting.

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