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HEALTHCARE ALERT
March 2012

 
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The following summaries are provided reflecting recent activity affecting select individual state Medicaid programs, in particular changes to reimbursements and provider tax assessments:

A budget bill passed by the Florida legislature on Friday, March 9th subject to final approval by Governor Rick Scott, cites reimbursement reductions that will primarily impact hospitals and long-term care providers. The proposal calls for about a 5.6% hit to hospitals, and a 1.25% reduction to nursing homes. These rate cuts will occur 7/1/12.  Also eliminated are payments for preventable hospital errors.1  The SNF rate cut is 50% of the House proposed cut of 2.5% due to lobbying efforts of the Florida Health Care Association and others, and it is noted that the proposed state budget increases the nursing home quality assessment (“NHQA”) by approximately $30 million which would bump the rate from $21.15 to approximately $22.85 per non-Medicare patient day and thus provide for a “buyback” of the intended rate cut.  As stated in the past, the true impact on a SNF provider is dependent on the recalculation of the rate components based on updated cost report data, the relationship of actual costs to targets and ceilings, and a facility’s payor mix and the net NHQA impact.

California has yet to implement the State Plan Amendment (“SPA”) 11-011 provision that calls for the temporary reduction in reimbursements of 10% to SNFs as part of the state’s budgetary issues and negotiations.  It is our understanding that the California Association of Health Facilities is still working with the state to determine a) when and if the reduction will take place; and b) the most reasonable, appropriate and least disruptive means to recover the 10% holdback for adjudicated claims on a retrospective basis in accordance with the SPA if indeed the Medi-Cal program can take care of the needed MIS payment changes that must be made to effectively implement the payment reduction and the capture of data for repayment.

With the continuing budget issues in the state, the state is delaying Medi-Cal payments in March by 14 days for the two check writes that are to occur during the month.  A bit of good news is that the state will implement the Assembly Bill 1629 rates that were effective 8/1/11, meaning that the Medi-Cal per diem rates will actually be paid to SNF providers by the end of March, with claims automatically being reprocessed at the increased rates to effectuate the retrospective rate adjustment.

The state of Nevada has recently modified its provider tax rate setting methodology effective 10/1/11, which calls for quarterly adjustments to the provider tax assessment, and is based on a two-tiered rate structure.  The assessment is now $33.56 per non-Medicare day effective 1/1/12 (prior quarters rate was $31.48) for nursing facilities with less than 65% Medicaid patient day utilization.  In addition, the state modified the high volume rate, which was previously applicable for SNFs with total patient days greater than 75,000.  The alternate rate, also effective 1/1/12, is $15.92 per non-Medicare day for facilities with Medicaid occupancy equal to or greater than 65%.

New Hampshire was awarded a $26.5 million grant over a three-year period from CMS, and the first state to receive new Medicaid grant money designed to keep patients at home and out of nursing homes and other healthcare institutions if the necessary community-based care can adequately and responsibly meet the requisite care plan.  The grant will run from April 1 of this year to 9/30/15, and CMS is seeking applications from other states for similar grants.

The state of Illinois recently received CMS approval for an additional provider tax as part of a statute calling for a Long-Term Care Provider Funding plan (305 ILCS 5/Article V-B).  The tax will be imposed on nearly all SNFs in the state in addition to the current bed tax and is to be applied on a retrospective basis to 7/1/11.  It will be based on an assessment rate of $6.07 per non-Medicare patient day, payable monthly and is in addition to the current $1.50 licensed per bed tax.  At this point, it appears that the program is waiting for the rule to be adopted, and is expected to be presented to the Joint Commission on Administrative Rules in April. 

Based on information received from the state’s Bureau of Long-Term Care, part of the assessment fund are targeted for use to bring nursing facilities up to full funding for MDS reimbursement retroactive to 5/1/11.  At this point, it is not clear how the retro payment of the new tax will be recouped or how and when the rate adjustment will be processed.

As of the January 1st, Medicaid per diem rates in the state of Tennessee were reduced by 4.25% due to budgetary issues.  There has not been a modification in the provider tax assessment, which is still based on $2,225 per licensed bed.  Although there has apparently been discussion for a rate cut reduction, nothing has been finalized or approved, but there is a “buyback” of 1.75% that has been introduced in the legislature.  It is unclear at this point how the funding of the buyback will be achieved, possibly via a bed tax modification or some other pay for initiative.

1 Per an article published by Modern Healthcare on 3/12/12.

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