07/24/2019

Budget Details Emerge, Questions Remain

Last week, the Ohio Legislature passed a budget which included significant increases for long-term services and supports providers, including 5.1% increases for Ohio’s Assisted Living and PASSPORT waivers, as well as preservation of a 2.4% increase for nursing facilities, by way of a new quality incentive payment. 

Subsequently, Governor DeWine issued 25 vetoes, including the increases to waiver rates, as well as portions of the nursing home quality incentive payment. 

Assisted Living and PASSPORT Waivers

In his veto statement regarding the waiver rate increases, which included vetoes of numerous other provider rate increases, Governor DeWine noted that: 

“The Ohio Department of Medicaid is supportive of increase of rates for the Assisted Living Waiver Program, tiered pharmacy supplemental dispensing fees, and increases for direct support professionals serving those with developmental disabilities and will implement the rate increase. However, these provisions and others that establish provider reimbursement rates ins statute, impose upon our ability of the director of the Ohio Department of Medicaid to appropriately manage the policies and costs of the Medicaid program in a way that benefits Ohio consumers and complies with federal regulations.”

At this point in time, LeadingAge Ohio has confirmed the Department’s intent to increase reimbursement rates to the Assisted Living and PASSPORT programs, but the Department has not yet stated at what levels it will increase rates. 

Nursing Facility Quality Incentive Payment

The legislature’s proposal to preserve the 2.4% increase that nursing facilities would have received under the market basket index increase by way of a quality incentive payment was included in the final bill, with some modifications to the criteria under which some providers would be excluded from receiving any quality incentive payment during the second  year (SFY 2021). The Conference Committee/As Enrolled version of the QIP included the following: 

• The QIP would be incorporated into the Medicaid rates during the second half of SFY 2020, beginning on January 1, 2020. 
• The total amount to be disbursed to nursing facilities via the QIP would be equal to the amount that would have been paid under the market basket rate increase, i.e., 2.4% for the second half of SFY 2020; and 2.4%, plus the Medicare market basket rate for FFY 2020 for the second year of the biennium (July 1, 2020-June 30, 2021); 
• During SFY 2021, nursing facilities would be excluded from receiving any update if they: 
• Had lower than 80% occupancy as of December 31, 2019; AND
• Had fewer than 15 quality points, according to the QIP calculation; AND
• Had not either opened or undergone a renovation in the past four years. 

The quality incentive payment for each facility would be calculated on a  per-quality point basis, based on their performance on four long-stay measures used in Nursing Home Compare. These measures are: 

• Percent of residents whose ability to move independently worsened 
• Percent of high-risk residents with pressure ulcers 
• Percent of residents who have/had a catheter inserted and left in their bladder 
• Percent of residents with a urinary tract infection

• Data for each calculation would be drawn directly from Nursing Home Compare using the latest calendar year data available.
  

• At the conclusion of SFY 2021, the quality incentive payment would remain the same portion of the nursing facility’s rate, and any increases thereafter would again be tied to the Medicare market basket increases for nursing facilities. 

Governor DeWine used line-item veto to strike two sections of the quality incentive program: 

First, the veto struck the language which referred to a four-year period following a renovation that a facility would not be excluded based on low occupancy. 

Second, the veto struck language that would increase the QIP in the second year of the biennium according to the Medicare FY 2020 market basket increase. 

The Governor’s veto statement indicated that the changed language would create a “doubling of the inflationary adjustment.” In subsequent conversations with the Department, LeadingAge Ohio has learned that primary concerns relate to how previous language related to the market basket increase interacts with the new language related to the quality incentive payment, and concerns that the payments as proscribed may overlap, creating a “doubling” of a single year’s market basket increase. 

LeadingAge Ohio continues to work with the Department and other stakeholder associations to ensure an appropriate resolution to the concerns and will share additional updates in future editions of The Source. To date, the Department of Medicaid has not shared when it will be releasing the FY 2020 rates, which were delayed by the interim budget process.