Medicaid Reimbursement & CON Update Pete Van Runkle - - PDF document

10/11/2019 1

Medicaid Reimbursement & CON Update

Pete Van Runkle pvanrunkle@ohca.org 614-361-5169

Waiver Reimbursement in HB 166

• Legislature approved 5.1% increase for assisted living, personal care

services in PASSPORT

• Legislature approved market-basket increases for both of above,

starting in SFY 2022

• Legislature appropriated $40 million for these increases for biennium
• Governor DeWine vetoed the statutory language

10/11/2019 2

Waiver Reimbursement: Administration Proposal

• Administration said legislature did not appropriate enough money to cover

the 5.1% increases intended by the legislature (MyCare Ohio left out)

• Administration proposed 3.25% increases, to be done by rule
• Assisted living plus personal care in PASSPORT, Ohio Home Care, and

MyCare waivers (not state plan home care)

• Administration considering emergency rules to make increases effective

immediately

• Stakeholders: how can we get to the 5.1% intended by legislature?
• We estimate it would require $22.8 million more
• Through first two months of fiscal year, Medicaid spending $53 million

under budget (remember that number)

Medicaid and PDPM

• PDPM eliminates many of the Medicare PPS assessments, allows

states to use Optional State Assessment (OSA) indefinitely for RUGs

• Ohio does not use PPS assessments to set Medicaid rates for its RUGs

system (with a couple of exceptions)

• Ohio does not need OSA and is not using it – continuing with OBRA

assessments (per updated ODM FAQ)

• Certain rule provisions conflict with assessment changes, most

notably requirement to combine admission and 5 or 14-day assessments

• ODM PDPM fact sheet says SNFs can ignore this rule until changed

10/11/2019 3

Future Questions

• When will CMS remove items from OBRA assessments needed to

calculate RUGs?

• What does CMS mean by “supporting RUGs”?
• ODM hiring contractor to develop new Medicaid system
• RFP is on the street
• Bids due by October 22, selection finalized December 9
• “[P]rovide expertise in the area of Nursing Facility (NF) Medicaid rate

development processes under new methodologies”

• Needed because “CMS has notified State Medicaid agencies that CMS will no

longer support RUGs IV after 9/30/20”

HB 166 and SNF Reimbursement

• Legislature provided for 2.4% market-basket increase July 1-December 31,

2019

• Legislature converted this into quality incentive payment averaging 2.4%

January 1-June 30, 2020

• Legislature increased quality incentive to 2.4% + FFY 2020 market basket

(also 2.4%) July 1, 2020-June 30, 2021

• Legislature reinstated market-basket statute effectively starting July 1, 2022

(after rebasing in SFY 2022), excluding tax and $16.44 components

• Governor DeWine vetoed second-year quality increase, effective date of

exclusions from market basket, renovation exception to occupancy penalty

10/11/2019 4

Rationale for Vetoes

• Legislature did not appropriate enough money to cover increases
• Language of bill required greater payout than estimated
• Renovation language was unclear
• Administration opposed to market basket at all times and in all places

As-Is State After Vetoes

• June rates paid for first 17 days of July (relates to interim budget (SB

171), also applies to CHOPs during period per rule 5160-3-65.1)

• Market-basket increase in effect July 18-October 16
• Veto moves effective date of removing taxes and $16.44 component

from market basket up to October 17, so market-basket increase reduced from October 17-December 31

• Quality incentive averaging 2.4% January 1-June 30, 2020
• Quality incentive averaging 2.4% July 1, 2020-June 30, 2021, with
• ccupancy penalty but without renovation exception
• We estimate $149 million instead of $229 million under HB 166

10/11/2019 5

Example of October 17 Rate Change

• Sample rate calculation as of July 18, 2019:
• Sample rate calculation as of October 17, 2019:
• ODM says they will post new rate letters for this change, expecting by

end of this week

• October billing will require two detail lines, as was the case for July

119.07 59.06 8.18 2.06 16.83

• 1.79

0.00 2.10 205.51 119.07 59.06 8.18 2.01 16.44

• 1.79

0.00 2.10 205.07

Budget Corrective Legislation – Not Final

• Administration agreed to provide full funding intended by legislature

(actually $238 million)

• This would be done by increasing average quality incentive percentage to

5.2% for SFY 2021

• In exchange, provider associations agreed to eliminate all statutory

language about market basket and stop the quality incentive after SFY 2021

• Rebasing for SFY 2022 untouched – continuation of quality incentive and its

structure to be negotiated for next budget in context of rebasing

• Both reductions - for first 17 days of July and for October-December 2019 –

to remain in effect

• Request for additional $37.6 million appropriation from legislature
• Renovation exception language would be restored in revised fashion
• To be enacted by legislature in corrective legislation (to be determined)

10/11/2019 6

CHOPs & New Buildings Excluded

• Administration opposes any quality incentive to a center that experienced

a CHOP starting 2018 forward unless the center has full calendar year of quality data under the current provider (change from historical approach)

• For example:
• January 1 quality incentive will be based on data for CY 2018, so a center that had a

CHOP in 2018 or 2019 will not have a full year of quality data under the new provider in 2018

• July 1 quality incentive will be based on data for CY 2019, so a center that had a

CHOP in 2018 could qualify, but not a center that had a CHOP in 2019

• As with the occupancy penalty, the money “saved” by not paying a quality

incentive to a center with a CHOP will be redistributed to qualifying centers

• Applies to new buildings coming on line during 2018 or 2019
• Cuts off quality incentive to any center that CHOPs within a fiscal year (i.e.,

between January 1, 2020, and June 30, 2021) – this money will not be redistributed

New Quality Incentive - Points

• Completely separate from “old” quality incentive – old incentive will

continue in parallel with “new” incentive, although measures revised for July 1, 2020

• Four quality measures for new incentive
• Long-stay pressure ulcers
• Urinary tract infections
• Catheters
• Ability to move worsens
• Publicly available CMS data for preceding calendar year – four-quarter

average

• CMS-assigned point values (see 5-Star Technical Users’ Guide April 2019)
• Divide CMS points by 20
• Default lowest group for each measure to zero points
• Sum points across 4 measures

10/11/2019 7

Quality Measures Data – CY 2018

https://data.medicare.gov/ or Google “CMS Medicare data”

10/11/2019 8

Nursing Home Compare Archived Data

• Scroll down to “2018 Annual Files” and download zip file
• Open folder and open

“Four_Quarter_AVG_MDS_QMs_ME_to_WY_2018.csv”

• Search your building by Medicare provider number
• Scroll to or search relevant QMs
• Note “2018Q4” number in column G
• Compare this number to cut points
• Note: cut points are shown as decimals, numbers in NH Compare data

are shown as percentages

2019 Quality Data

• Same data source (CMS Nursing Home Compare/Five-Star)
• Same measures and cut points
• Final quality data will not be available until spring 2020, but can be

estimated now

10/11/2019 9

Table of Cut Points from Users’ Guide

Ability to Move Pressure Ulcers UTIs Catheters Points 0.0821 0.0377 0.0070 0.0050 150/100 0.1121 0.0584 0.0160 0.0126 135/80 0.1350 0.0783 0.0272 0.0217 120/60 0.1568 0.1057 0.0452 0.0356 105/40 0.1760 >0.1057 >0.0452 >0.0356 90/20 0.1955 75 0.2153 60 0.2394 45 0.2747 30 >0.2747 15

10/11/2019 10

New Quality Incentive: Value Per Point

• Quality incentive pool
• Percentage of each SNF’s base rate (2.4% for January 1, 5.2% for July 1)
• Base rate = direct, ancillary/support, capital, taxes, $16.44 add-on
• Multiply by Medicaid days
• Sum for all centers
• Quality point days
• Sum points for all centers
• Multiply by Medicaid days
• Divide pool by point days
• Current OHCA rough estimates
• Around $0.41 per point for January 1
• Around $0.90 per point for July 1

Example – January 1, 2020

• Facility X has long-stay pressure ulcer percentages in CY 2018 as follows:
• Cut points from Technical User’s Guide:
• Facility X’s score is in the 20-point range

Q1 Measure Score Q2 Measure Score Q3 Measure Score Q4 Measure Score Four Quarter Average Score 17.30769 17.3913 14.63415 22.22222 17.71428

10/11/2019 11

Example – January 1, 2020, cont.

• Divide points (20) by 20 = 1
• Facility X is in lowest percentile, so it defaults to 0 points
• Let’s assume the following points on the other QMs:
• Let’s assume the value per point is $0.41
• Facility X’s new quality incentive payment is 15.5 * $0.41 = $6.36 in

addition to old quality incentive payment

Pressure ulcers Catheters UTIs Ability to move Total 0.0 4.0 4.0 7.5 15.5

Example – January 1, 2020 cont.

• Let’s assume Facility X’s rate as of December 31 is $202.12, with $4.71
• f that being the market basket
• Let’s also assume Facility X’s CMI does not change
• Rate calculation:
• $202.12 - $4.71 = $197.41 (stripping off market basket)
• $197.41 + $6.36 = $203.77 (adding quality incentive)

10/11/2019 12

Occupancy Penalty

• Begins July 1, 2020
• Occupancy is a kick-out measure, not an additional quality measure
• 80% occupancy or 15 quality points - this is an “either/or” – if center meets

either criterion, gets incentive

• Actual incentive calculation like SFY 2020 but redistributes money from

disqualified centers (as for CHOPs/new buildings on January 1)

• Occupancy based on inpatient days from 2019 cost report
• Divided by licensed beds at end of 2019 as reported on cost report
• Exceptions to occupancy requirement (pending corrective legislation):
• Building opened in preceding calendar year (excluded anyway because of insufficient

quality data)

• Beds unusable during preceding calendar year because of force majeure event
• Renovation costing $50,000 or more in preceding two CYs affecting beds

Example of Occupancy Penalty

• Three centers:
• Results:
• Facility X gets new quality of 15.5 * value per point
• Facility Y gets new quality of 9.0 * value per point
• Facility Z gets nothing

Facility Occupancy using 12/31/2019 beds Total quality points from 2019 data Facility X 78.6% 15.5 Facility Y 82.3% 9.0 Facility Z 79.3% 13.5

10/11/2019 13

Example of Occupancy Penalty cont.

• Let’s assume all three centers had rates of $197.64 before the new quality

incentive

• Let’s also assume the value per point is $0.90
• Calculation:
• Facility Z would have received an additional $12.15 if its occupancy had been 80%

Facility Rate before quality Qualifying points Value per point Quality incentive payment Total rate Facility X $197.64 15.5 $0.90 $13.95 $211.59 Facility Y $197.64 9.0 $0.90 $8.10 $205.74 Facility Z $197.64 0.0 $0.90 $0.00 $197.64

Analysis for November

• What is your occupancy likely to be (calendar year 2019)?
• If under 80%, how many beds would you have to give up to get to 80%?
• What are your quality points likely to be (4-quarter average for 2019)?
• What is best estimate of value per point for July 1, 2020 (ask OHCA)?
• What is your estimated quality incentive if 80% occupancy achieved?
• What do you estimate to be the value of the beds you would have to

surrender?

• This is not relevant if CHOP/new facility exclusion applies
• Surrendering beds: ODH Licensure Office, Bill Robbins, 614-466-7218

10/11/2019 14

New CON Restrictions

October 16 !!

After that Date …

• You cannot do any of the following in a county that is not under-bedded:
• Replace an existing SNF
• Add beds to an existing SNF by moving beds within the county
• Renovate an existing SNF if a CON is required for the renovation
• You cannot acquire an existing SNF and replace it even in an under-bedded

county – other projects are permissible in under-bedded counties

• These restrictions last until June 30, 2021
• You can do the following in any county regardless of under-bedded/over-bedded:
• Import beds from a contiguous county
• Sell beds to a provider in a contiguous county
• These transactions are subject to current requirements (to an existing SNF, no more than 30

beds in 5 years)

• Under-bedded/over-bedded determined using 2016 calculations

10/11/2019 15

10/11/2019 16

Special 2020 Review Period

• Begins January 1
• Locks in 2016 bed need and bed supply calculations
• Certain counties excepted (bed caps assume comparative review):
• Delaware County, 200 beds
• Greene County, 99 beds
• Lake County, 200 beds
• Licking County, 185 beds
• Medina County, 200 beds
• Beds to be moved to these counties must be from over-bedded counties,

as usual, but with additional restrictions:

• CON applicant has to be owner or operator of a building in recipient county (except

for Greene)

• Source of beds cannot be a 4 or 5-star center unless it is closing
• Other counties that may have bed need: Athens, Clermont, Fairfield,

Geauga, Paulding, Pickaway, Portage

10/11/2019 17

Examples

• Provider A is full and wishes to acquire 20 beds to add to the building
• Provider B wishes to close the center and sell the beds
• Provider C has an aging physical plant and wishes to rebuild the

center on a site two miles away in the same county

• Provider D has two buildings in the same county, one full and the
• ther 70% occupied, and wishes to move beds from one center to the
• ther
• All four providers are in counties that are “not under-bedded”

Example of Interaction with Reimbursement Occupancy Penalty

• Example: Provider E has 70% occupancy and wishes to transfer 15

beds to improve occupancy

• Must remove beds from licensed capacity by December 31, 2019, to

not count against occupancy for July 1, 2020, Medicaid rates

• Relationship to CON - beds must be “existing” to be included in a CON
• Existing means beds a) are licensed and b) were utilized for 365 days

within the two years before application filed

• Bottom line: CON application would have to be filed and approved

before December 31

10/11/2019 18

SNF Operator Entry Criteria

• Apply to changes of operator (licensee) for SNFs only
• Applicant for new license must provide additional information to ODH
• Must show financial fitness to operate for 12 months (lessee new to

Ohio must furnish bond unless unavailable)

• 5 years’ operational experience
• Liability insurance and quality assurance plan
• Document all other centers in any state with any amount of
• wnership
• ODH has made no pronouncements as to how they will apply these

requirements