Quality Assessment Changes Implementation Plan

CMS has finally approved the State Plan Amendment (SPA). The SPA authorizes the nursing home reimbursement changes coming out of 2011 Indiana General Assembly. The Division of Aging has provided LeadingAge Indiana with the timetable for implementation. All of these changes will be effective Oct. 1, 2011 except for the increase in the Quality Assessment (QA) which begins on July 1, 2011 as described below:

· The QA amount that is paid in by a nursing facility will increase from $10 per non- Medicare day to $14.70 as of July 1, 2011 and $16.00 as of October 1, 2011 for facilities with less than 70,000 days. For facilities with more than 70,000 days, the QA amount paid will be $3.68 as of July 1, 2011 and $4.00 as of October 1, 2011. The Quality Assessment Add-on reimburses part of this assessment based on a facility’s percentage of Medicaid days.

· The Quality Add-On, which is based on the Report Card Score (RCS), is increased. The current maximum is $5.75. The new RCS maximum effective October 1, 2011 will be $14.30. The add-on will be calculated the same way as it has in the past.

· There is an add-on to account for rental of medical equipment, such as oxygen concentrators and low air loss mattresses, cable television, pet expenses, support for software used in direct patient care, such as MDS software, and dentures purchased for residents when the facility is responsible for the expense. This amount will be the same for all providers. The State has agreed to an add-on for these expenses of $0.75 with an effective date of October 1, 2011.

· Money in the Closure/Conversion Fund: There is an additional $8 million dollars remaining in the Nursing Facility Closure and Conversion Fund at 6-30-2011. The State agreed to pay this money to providers through an additional add-on to the Administrative rate component. This amount will receive a federal match and will add $1.84 to the Administrative component effective Oct 1, 2011.

The Division provided LeadingAge Indiana with a schedule for retroactive adjustments for these changes now that the SPA has been approved. They indicated that the difficulty and complexity of these retroactive adjustments requires that they get rolled out between August 1 and October 31 as shown here:

This means that the first adjustment for the July 1, 2011 – September 30, 2011 period will be made by August 1, 2012. This will only include the increase in the Quality Assessment from $10/day to $14.70/day.

Myers & Stauffer indicated that the maximum negative impact would be around $30,000 with the average negative impact being $9,000 depending on the facility’s percentage of Medicaid days. CCRCs will see no impact since they are exempt from paying the QA.

The retroactive adjustments for the positive changes should begin September 5th, and will include the items noted above; and the increase in the QA from $14.70/day to $16.00/day. This will be for the period Oct. 1, 2011 to Dec. 31, 2011. The other two quarters will be adjusted on Oct. 3rd and Oct. 31st.

Should you have any questions, please contact Jim Leich at jimleich@leadingageindiana.org or at 317-733-2380.