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State Plans Medicaid Increases for Nursing Home Labor Costs

All nursing homes in the state are slated to receive an increase to their Medicaid rates to reflect increases in workforce costs, with supplemental funding available to facilities for recently settled collective bargaining agreements. These increases are being funded from proceeds to the State from the sale of the insurer Fidelis Care to Centene. We are advised that the increases do not require additional authority from the Legislature to be implemented, as they are being derived from the Health Care Transformation Fund, which was included in the 2018-19 State Fiscal Year budget legislation.

The official notice of the base Medicaid rate adjustment being applied to all nursing homes appeared in the Oct. 31st State Register (see page 90) and reads in part as follows:

“Long Term Care Services

Effective on or after November 1, 2018, the Department of Health will adjust the operating component of rates of reimbursement for nursing homes, certified under Article 28 of the Public Health Law, to reflect an across the board investment not to exceed one and one-half percent (1.5%).”

The Dear Administrator Letter (DAL) (see related story in this issue) accompanying the Nov. 1st nursing home Medicaid rates also refers to the 1.5 percent increase and provides facilities with estimates of their per diem increases, which are being included in the miscellaneous adjustment line.

The same notice provides that acute care hospitals will also receive an across-the-board adjustment to their rates. Subject to federal approval, these increases will be made to the rates effective Nov. 1, 2018 and would remain in the rates similar to a trend factor adjustment until at least March 31, 2022. State officials have told us that this added funding would not affect adjustments that would otherwise be made for minimum wage increases or the levels of future funding associated with the Advanced Training Initiative program and the CYNERGY collaborative.

We are also advised that supplemental funding is planned for nursing homes (and hospitals) that are currently settling collective bargaining agreements with SEIU 1199. According to our understanding, these nursing homes would receive added funding reflective of 85 percent of the additional compensation costs associated with the new collective bargaining agreement, net of the value of the 1.5 percent trend factor adjustment. Certain details are still being worked out, including whether and how nursing homes with pre-existing SEIU 1199 labor agreements will receive supplemental funding over and above the 1.5 percent adjustment.

In spite of LeadingAge NY’s recent discussions and advocacy with the Governor’s Office and the Division of the Budget (DOB), other provider sectors including home care, hospice, adult day health care, and adult care facilities (ACFs) will not be receiving similar adjustments to Medicaid and Supplemental Security Income (SSI) rates of payment at this time. We will be continuing our advocacy for such increases.

Centene Corporation, a for-profit insurer, purchased the assets of the not-for-profit insurer Fidelis Care for $3.75 billion effective July 1, 2018. This transaction provides New York State with as much as $2 billion in funding over a five-year period to invest in the State’s health care system. Part of this funding is being used to generate federal matching payments to fund the Medicaid rate increases noted above.

We will keep members posted as more details emerge on this plan.

Contact: Dan Heim, dheim@leadingageny.org, 518-867-8866