Quality Pool on the Move and Other Rate Updates
In a meeting with LeadingAge NY and other associations, the Department of Health (DOH) provided information on proposed budget provisions that would impact nursing homes and reported that they are working toward making quality pool rate adjustments. Highlights of the discussion are provided below.
Cash Receipts Assessment. As a result of the recent resolution of the legal challenge to the Nursing Home Quality Initiative (NHQI), commonly referred to as the "quality pool," DOH is moving forward with calculating rate adjustment amounts for the four outstanding NHQI payment years (2013-2016). The NHQI is a budget-neutral, self-funded pool totaling $50 million in each of the four years; therefore, the rate adjustments will redistribute $50 million per year of Medicaid funding that has already been paid. Homes that scored in the top three quintiles will see a positive rate adjustment, while those scoring in the bottom two quintiles will see a negative adjustment. Each year is scored separately, and each home is likely to have a unique adjustment amount each year. Adjustment amounts are calculated based on each home’s quintile as well as their Medicaid revenue.
DOH is examining the four-year net impact on individual homes and will meet with LeadingAge NY and other associations to further discuss whether to make the rate adjustments at once or to spread them out over time. The Department has indicated a willingness to work with financially distressed homes that will face negative adjustments.
We are urging DOH to share the 2015 and 2016 adjustment amounts with homes as soon as they are available. The 2013 NHQI per-day adjustment amounts are listed on the July 2014 benchmark rate list; 2014 adjustment amounts are on the July 2015 and subsequent benchmark lists (available here). Multiply the per-day amount by the appropriate year’s fee-for-service Medicaid days reported by your home to estimate the annual fee-for-service impact.
The managed care benchmark rate has included the 2014 NHQI adjustment since 2015, and discussions continue on whether and when these would be reconciled. We continue to recommend to DOH that this reconciliation be done through fee-for-service.
One Percent Rate Supplement. As part of the 2018-19 state spending plan proposed by the Governor, DOH would increase 2018 nursing home Medicaid rates by approximately 1 percent and pay four years of retroactive rate supplement (attributable to April 2014 – March 2018) over the course of four years. That would mean that starting in 2018, Medicaid rates would increase by $70 million per year. In addition, for the next four years, another $70 million per year would be paid to reflect four years of retroactive payments (i.e., a total of $140 million per year for each of the next four years).
While this is good news, please note that federal approval is still pending and that the four-year payment plan may require a modification to the Medicaid State Plan Amendment that the state submitted previously. In addition, DOH continues their interest in resolving any outstanding litigation on the rate methodology prior to making these payments. This funding represents the reinvestment into rate proceeds of the non-reimbursable 0.8 percent assessment that was enacted in lieu of an across-the-board cut imposed on most other Medicaid providers. The cut for other providers was eliminated in April 2014, but nursing homes have continued to pay the assessment.
Case Mix. DOH continues to express concern about increasing case mix, which has risen an average of 5 percent per year since the shift to MDS for case mix calculation was made. The state is seeking to decrease the $30 million in MDS audit findings that resulted from Office of the Medicaid Inspector General (OMIG) 2014 audits. To address this, a provision in the proposed budget would require DOH and the provider community to work cooperatively to revisit the current case mix data collection and calculation process to promote accurate MDS data reporting and reduce audit findings so as to achieve a $15 million annual savings.
DOH has not yet issued the annual notification of case mix “picture dates” and roster submission periods for 2018. They intend to release it shortly but reported that, as of last week, they had not finalized whether Jan. 31st, the last Wednesday of January, would be the picture date. We will echo the information to members as soon as it is available.
Assessment Reconciliation. DOH reconciled the 2016 Cash Receipts Assessment payments, and members should have received the resulting payment adjustment in Medicaid payment cycle 2106 (released on Jan. 17th). While DOH has posted a backup listing of data used in calculating the assessment on the Medicaid Rates web page, that listing appears to be inaccurate. An accurate list that DOH compiled and shared with us can be downloaded here.
State Budget. Along with the case mix and rate supplement provisions discussed above, the proposed Executive Budget contains several other items specifically targeting nursing homes as well as a number of provisions that impact multiple provider types. All of these are covered in our Executive Budget Summary, available here. The most notable provisions include:
- Fee-for-Service Medicaid for Long-Stay Nursing Home Residents: This proposal that is similar to recommendations advanced by LeadingAge NY would exclude nursing home residents from Managed Long Term Care (MLTC) enrollment after six months of nursing home care, thereby requiring these residents to revert to fee-for-service Medicaid. LeadingAge NY has advocated for the removal of the nursing home long-stay benefit from the MLTC benefit package and has forwarded a proposal that would not require MLTC enrollment for this population.
- Capital Rate Reduction: A provision requiring DOH to convene a workgroup of DOH, nursing home, and hospital representatives to develop recommendations for streamlining Medicaid capital reimbursement methodologies that would result in a 1 percent savings in nursing home and hospital capital expenditures. The reduction would include nursing home specialty unit and adult day health care program capital. If the reduction were to be implemented proportionally to current hospital and nursing home capital spending, $7.6 million of the cut would be absorbed by nursing homes and $5.8 million by hospitals.
- Low Quality Score Penalty: A proposal to reduce Medicaid reimbursement by 2 percent for homes with poor Nursing Home Quality Initiative (NHQI) scores. Homes that score in the lowest quintile in the most recent year and also scored in the lowest or second-lowest quintile in the previous year would have their Medicaid rate reduced by 2 percent for one year. The proposal is expected to affect roughly 100 homes, but DOH would have the authority to waive the reduction in cases of extreme financial distress.
Contact: Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841