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Nursing Home Payment Updates Coming in March

With the State’s fiscal year coming to a close at the end of March, the Department of Health (DOH) has processed a number of payment adjustments that are expected to be reflected in Medicaid cycle 2377, scheduled for a check release date of March 29th. In addition to issuing January 2023 Medicaid rates and making payment adjustments to reflect 2021 Quality Pool performance, the State has released several targeted distributions that members should be aware of when trying to decipher their Medicaid payment in cycle 2377. A summary of the adjustments with links to the associated Dear Administrator Letters (DALs) is provided below. We are pleased that the Department is moving forward in paying the State share of several distributions pending Centers for Medicare and Medicaid Services (CMS) approval of the associated State Plan Amendments (SPAs). It is expected that once federal approval is obtained, DOH will distribute the remaining half of the funding.

Jan. 1, 2023 Medicaid RatesDOH has posted January 2023 Medicaid rates updated for case mix and capital on the Healthcare Financial Data Gateway section of the Health Commerce System (HCS). The associated DAL is available here. The case mix adjustment is calculated using Medicaid Minimum Data Set (MDS) assessments submitted from April 1st through Sept. 30, 2022. The new rate also updates the minimum wage add-on to reflect any reported 2023 increase and recalculates the 1.5 percent investment implemented in November 2018.

2021 Nursing Home Quality PoolThe Nursing Home Quality Initiative (NHQI) categorizes nursing homes into quintiles based on their overall score on a number of quality measures. Lump sum payment adjustments are made based on the quintile assignment. This year’s distribution provides approximately 1.3 percent of annual Medicaid revenue to those in the best quintile, 0.8 percent to those in the second, and 0.2 percent to those in the middle quintile. Facilities in the fourth and fifth quintiles will see a negative adjustment equivalent to about 0.8 percent of annual Medicaid revenue. Specialty facilities and continuing care retirement communities (CCRCs) are excluded from the NHQI.

DOH has posted the backup calculations here, and the DAL with the funding distribution formula is here. The full list of measures and scoring conventions used in the 2021 NHQI is available here.

2021 Rate AppealsDOH processed 2021 rate appeals for 22 facilities that will also be reflected in Medicaid payment cycle 2377. Affected members should have received notification from DOH, which we echoed. The associated DAL is available here, with updated rate sheets and calculations posted to the HCS. Any further appeals to these rates must be filed within 30 days of March 7, 2023.

CINERGY FundingPending approval of the associated SPA by CMS, the Department has issued the State share (i.e., approximately half) of the 2022-23 CINERGY funding to participating facilities. Participating homes were separately notified. The associated DAL is here.

Enhanced ATIPending approval of the associated SPA by CMS, the Department has issued the State share (i.e., approximately half) of new “Enhanced Advanced Training Initiative (ATI)” funding. Facilities eligible for this funding were separately notified. Note that “Enhanced ATI” is a distinct and separate program from "standard" ATI, which has been in place for a number of years.

“Standard” ATI is a $46 million annual pool that is distributed based on an annual staff retention eligibility test. That program requires eligible recipients to implement a training program working with a DOH-approved training partner. Hospital-based homes and facilities that receive Vital Access Provider (VAP) funding (e.g., CINERGY) are categorically excluded from “standard” ATI.

Enhanced ATI is a separate initiative. Eligibility is based on participation in a comprehensive health, retirement, and training benefit fund covering at least 100 nursing homes to address direct care staff turnover and demonstrate evidence of employer investment in retention as well as a three-year average operating margin that is lower than 1 percent. DOH prequalified those eligible. To remain eligible, awardees must submit periodic reports to DOH that attest to their achievement of benchmarks and goals. The associated DAL is here.

Staffing FundingThe cycle 2377 Medicaid payment also incorporates the State share of funding aimed at helping nursing homes defray the cost of meeting staffing level requirements. Note that some homes may receive this distribution in a later Medicaid payment cycle. This funding was appropriated in the 2022-23 State Budget and is awaiting federal approval. More detail will be available when DOH releases the DAL, which we will echo to members.

Given the number of adjustments that may be included in Medicaid payment cycle 2377, we recommend that members identify and validate the individual distributions. Please reach out if you have questions.

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