Nursing Home Reimbursement Update
(July 1, 2025) The Department of Health (DOH) notified nursing homes on June 27th that the January 2025 Medicaid rate sheets have been posted to the Healthcare Financial Data Gateway section of the Health Commerce System (HCS). The posting is named “2025 Initial NH rates,” but please keep in mind that the drop-down menu may not present postings in alphabetical or chronological order. Case mix, which would typically be the largest moving part of a rate update, is frozen, so the most material portion of this update is the capital rate, which is subject to a 15 percent reduction. Providers may also see some update to facility-specific minimum wage funding based on data reported on the minimum wage survey, while pediatric homes should see the 2025 trend factor incorporated into the rate. Payment updates to reflect the new rates, retroactive to Jan. 1, 2025, will be included in Medicaid payment cycle 2499, which is scheduled to be released on July 30th. The associated Dear Administrator Letter (DAL) is available here.
As was the case with April 1, 2024 capital rates, we recommend that members submit a capital appeal challenging the 10 percent reduction.
Along with the rate update, the Department has also updated the 2 percent quality penalty (i.e., reduction) applied to the Medicaid rate of homes that scored in the bottom quintile in the 2023 Nursing Home Quality Initiative (NHQI) AND ALSO scored in the fifth or fourth quintiles in the 2022 NHQI. Homes in this situation will see a 2 percent reduction in their Medicaid rate retroactive to Jan. 1, 2024. With this update, any home that was currently subject to the 2 percent penalty based on 2021 and 2022 NHQI results and that is no longer subject to the penalty will see their existing 2 percent penalty RESTORED retroactive to Jan. 1, 2024. These adjustments are scheduled for Medicaid cycle 2498, scheduled to be released on July 23rd. The associated DAL is available here.
In addition, we are pleased to report that the Centers for Medicare and Medicaid Services (CMS) has approved the 2024-25 public nursing home Upper Payment Limit, allowing 2024 Intergovernmental Transfer (IGT) payments to be made. Although these payments do not implicate state funding, they require approval by the Division of the Budget (DOB). Once that is received, the State will move forward with the process. The statewide total approved is $255 million, a 20 percent increase from the prior year’s $212 million figure. Preliminary indications are that the State is likely to issue the payment to county homes in a single installment. We will continue to push for timely issuance of the payments and will keep members apprised of timelines and developments.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841