Division of Health Care Financing and Policy
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1 Division of Health Care Financing and Policy Presentation to the Legislative Subcommittee on Post Acute Care in Nevada February
2 Topics of Discussion Post acute care-types of services Current rate methodologies History of rates- revisions to methodology and changes to rates Provider tax Difference in costs between institutional care and home and community based care Impact of Medicare and other public and private funding sources 2
3 Post Acute Care Skilled Nursing facilities (SNF) Free Standing Hospital Based Home and Community Based Services Personal Care Services Home Health/Private Duty Nursing Adult Day Health Care 3
4 Rate Methodologies Current rate methodologies Hospital Based Interim rates, then cost settled Free Standing - Facility specific rate, calculated quarterly, based on costs, acuity, and case mix Personal Care Services Home Health/Private Duty Nursing Adult Day Health Care 4
5 Hospital Based SNF SNF that are hospital based are paid an interim rate, then cost settled annually Defined in State Plan 4.19-D (A) Paid under Medicare s cost based reimbursement principles, not to exceed the Upper Payment Limit (UPL) Cost Reports are audited and the routine cost limit (RCL) is applied to determine the settlement amount 5
6 Other Post Acute Services Personal Care Services Home Health/Private Duty Nursing Adult Day Health Care HCBS Waiver The 2001 Legislative Session enacted A.B. 513 Strategic Healthcare Plan for Nevada. Thereafter a Provider Rates Task Force was created. In January 2002 EP&P Consulting Inc. was selected and did research and analysis of Nevada s rate structure for waiver services. Rates for some waiver services were recommended by the Provider Rates Task Force and were adopted by the DHCFP August 15, Due to service type and intensity, the rates vary. Detailed reimbursement methodology for these services can be found in the Medicaid State Plan Attachment 4.19-B at the following link: nuals/msp/sec4/section4-19attachmentb(1).pdf. Rates can be found on the DHCFP website at 6
7 History of SNF rate 2000 A study of reimbursement methodologies was completed for nursing facilities. DHCFP, in partnership with the industry through the Nevada Health Care Association agreed to a rate setting model which is based, in part, on the relative acuity of the mix of patients in each facility 2001 SNF operating rates were based on six levels of care to which each facility had a facility-specific capital rate added. A SPA approved April 26, 2002 established the operating rates to be effective October 1, The direct health care component was adjusted for the change in their average Medicaid Case Mix Index (CMI) The Resource Utilization Group (RUG-III) system was used as the resident classification system to determine the CMI based on the Minimum Data Set (MDS) from each facility Each acuity adjusted quarterly 7
8 History of SNF rate New price based nursing facility reimbursement system. Was adopted Current system Due to budget deficits, the NV State Legislature approved a $5.00 per day reduction to the per diem base rate and the adult vent add-on rate. 8
9 Current Reimbursement Calculation For Free Standing SNF Facility price-based reimbursement system: Individual facility rates are developed from prices established for three separate cost centers: Operating Cost Center (to determine operating price) Direct Health Care Cost Center (salaries, wages, benefits) Capital Cost Center (allowable depreciation, capital related interest, rent/lease and amortization expenses, fair rental value (FRV)) Elements of the Rate Setting System Inflation Factor Base Year Cost Report & Rebasing Frequency Special Care Rates Minimum Direct Care Staffing Rate Adjustment for Changes in State/Federal Laws Budget Adjustment Factor 9
10 Budget Adjustment Factor In the event that the reimbursement system described in this section would result in anticipated payments to nursing facility providers being greater or less than the funding appropriated by the Nevada legislature, proportional increases or decreases will be made to the rates so that anticipated payments will equal legislative appropriations. This adjustment to rates will be made as a percentage increase or decrease in each provider s rate. The percentage will be determined in accordance with the following fraction: (Legislative appropriations / (The Sum of Each Facility s Calculated Rate Multiplied by Each Facility s Proportional Share of the Anticipated (Budgeted) Case Load for All Freestanding Nursing Facilities). 10
11 Budget Adjustment Factor $ Weighted Average Full Rate Per Diem X 245,234 Medicaid NF Bed Days $54,297,271 Total Payments at Full Rate Per Diem $ Base Rate X 245,234 Medicaid NF Bed Days $28,608,998 Total Payments at Base Rate Divided by $28,608,998 Payments at Base Rate $54,297,271 Payments at Full Rate % Budget Adjustment Rate 11
12 Free Standing Calculation Base Rate calculation: Average Per Diem Rate 2003 $ Minus $5 Rate Reduction 2011 (5.00) Base Rate 1/1/2016 $
13 Budget Adjustment Factor Reduction Fair Rental Value + Operating Statewide Price + Direct Health Price = Total Full Rate 13
14 Provider Nursing Facility Equivalent Daily Rate with Supplemental Payment Budget Neutral Per Diem Rate Quarterly Supplemental Payment Medicaid Days Supplemental Payment per Day Equivalent Daily Rate XXX , , YYY , ZZZ , , Budget Neutral Per Diem Rate + Supplemental Payment Per Day = Equivalent Daily Rate 14
15 Average Equivalent Rate Per Diem SFY-11 Qtr * Daily Rate SFY-12 Qtr SFY-13 Qtr SFY-14 Qtr SFY-15 Qtr *There is no equivalent rate, as provider tax was built into the per diem rates. 15
16 Special Care Rates Behaviorally Complex add-on Rate $ i. 1-8 hours ii hours iii hours Tier I $ Tier II $ Tier III $ Ventilator Add-on Rates 21 and over $ $ Pediatric Level I $ $ Pediatric Level II $ $
17 Negotiated SNF Rates Negotiated rates are sometimes needed in special situations such as access to care or difficult placement Both facility specific and patient specific rates can be negotiated Facilities with negotiated rates are not eligible for supplemental payments 17
18 Provider Tax Per NRS , all free-standing nursing facilities in Nevada are assessed a provider tax for all non-medicare bed days Tax rates are calculated quarterly and are collected monthly by DHCFP based on data reported every month by each free-standing nursing facility The provider tax collected is calculated at the federal maximum allowable of 6% of net revenues as reported by the Facilities Two tax rates are assessed: 1. Facilities with a Medicaid Occupancy of greater than 65% are assessed the Nominal Tax Rate ($18.58) for every Non-Medicare Bed Day* 2. Facilities with a Medicaid Occupancy of less than 65% are assessed the Uniform Tax Rate ($35.38) for every Non-Medicare Bed Day * Penalties and interest are charged for overdue tax payments *Rates effective for SFY 2016 Q3 18
19 Provider Tax History Prior provider tax methodology tax rates were assessed at: $ 1.75/Bed Day - 2 Largest Facilities $ 22.95/Bed Day - All Other Facilities Methodology was changed to the current in 2011 The Provider Tax collected becomes the non federal share of the Supplemental Payment to Free Standing Nursing Facilities in Nevada 19
20 Calculation of Funds Available $130,071,890 Total Net Patient Revenues reported in Base Quarter (x) 6% Tax Rate $7,804,313 Total Provider Tax/Non-Federal Share ( - ) ($78,043) Minus 1% Admin Fee $7,726,270 Total Available for Non-Federal Share (+) $14,304,726 Federal Match (64.93%) = $22,030,996 Total Quarterly Supplemental Payment (SFY 2016 Q3) $7,343,665 Monthly Supplemental Payments 20
21 Distribution of Supplemental Payments 1. Acuity Portion of Supplemental Payment = $11,015, Medicaid Occupancy, MDS & Quality Portions = $11,015,498 a) Medicaid Occupancy (82%) = $9,032,708 b) Minimum Data Set (MDS) Accuracy (9%) = $991,395 c) Quality (9%) = $991,395 21
22 Elements of Supplemental Payment Acuity Portion Calculated by dividing the total amount available by the total days in the base quarter to create an average acuity payment per bed day The average acuity payment per bed day is then weighted by individual Nursing Facility factors to create a facility specific per day supplemental payment for acuity 22
23 Elements of Supplemental Payment Medicaid Occupancy Portion Calculated by dividing the total amount available by the total number of Medicaid days in the base quarter to determine a Medicaid Occupancy per day unit value. The unit value is multiplied by the individual Nursing Facility values to determine the quarterly Medicaid Occupancy portion of the supplemental payment. Minimum Data Set (MDS) Accuracy Portion MDS is a U.S. federally mandated reporting process for clinical assessment of the functional capabilities of all residents in Medicare or Medicaid certified nursing homes. Sent by the Nursing Facilities, it is periodically reviewed and verified by DHCFP LTSS staff and assessed for accuracy. A Nursing Facility will receive a MDS Accuracy portion to their supplemental payment if their accuracy exceeds certain standards. 23
24 Elements of Supplemental Payment Quality Portion A facility will receive a quality point for every % that the facility average is better than the state average for each quality measure 14 Quality Points Facility AAA x $ 2,529 Quality Points Unit Value = $35,407 Quarterly Quality Payment Facility AAA 24
25 Elements of Supplemental Payment Total Quarterly Supplemental Payment for each Nursing Facility: Acuity Payment + Medicaid Occupancy Payment + Quality Payment + MDS Accuracy Payment = Quarterly Supplemental Payment Amount Divided by 3 = Monthly Supplemental Payment 25
26 Impact of HCBS on Costs 26
27 Nursing Facility vs. HCBS Recipients 27
28 Additional Funding Sources Third party liability (TPL) For shorter term post acute services Medicaid is the payer of last resort Medicare and private insurers Do not cover most long term services Do cover home health care, some rehabilitation services Medicare covers the first 90 days of a nursing facility stay Money Follows the Person (MFP) Grant Expires in 2017 Provider Tax 28
29 Impact of MCO Nevada s State Plan defines that the MCOs only cover: The first 45 days of SNF services Personal Care Services (PCS) Home Health services 29
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