DHHS Announces Nursing Home Medicaid Rates Moving to Pay for Quality

News Release
For Immediate Release: 6/5/2019

Julie Naughton, Communications and Legislative Services, (402) 471-1695 (office); (402) 405-7202 (cell); julie.naughton@nebraska.gov


Lincoln – The Department of Health and Human Services' Division of Medicaid and Long-Term Care (MLTC) has completed the annual Medicaid rebasing of nursing facility rates for State Fiscal Year (SFY) 2020 (July 1, 2019 – June 30, 2020). State regulations (471 NAC Chapter 12) require MLTC to rebase Medicaid payment rates annually. The nursing facility payment rates were communicated to all Nebraska nursing homes on June 5, 2019 and are effective July 1, 2019.

The statewide average per diem base rate across all Medicaid levels of care for nursing facilities is estimated to increase by approximately 6.1%. This increase is a result of increased appropriations approved by the legislature and governor, which consists of a 2% provider rate increase and an additional one-time appropriations increase of approximately $7.4 million dollars. The estimated average per diem base rate for SFY 2020 is $190.51, which is a $10.95 increase from the SFY 2019 average per diem base rate of $179.56. While there is an increase in the overall statewide average per diem base rate, not all providers will receive a year-over-year rate increase due to the current methodology as codified in state regulations. For SFY 2020, 165 nursing facilities will see an increase in their per diem base rates and 29 facilities will see a decrease in their per diem base rates.

Under the current methodology in the regulations, MLTC rebases per diem rates annually using allowable costs and patient days as submitted by nearly 200 nursing facilities across the state, which are used to project the estimated spend for the upcoming SFY. The costs and projected spend from the nursing facility cost reports do not directly align to the amounts appropriated on a year to year basis. The payment methodology in regulations require that MLTC apply an adjustment to the projected spend amount in order to align the projected spend to the amount appropriated; this is referred to as the “inflation factor." The inflation factor necessary to develop the SFY2020 Nursing Home rates is a negative 4.98%.

MLTC, with stakeholder collaboration, is currently underway on a project to modernize the payment methodology utilized to determine per diem Medicaid rates for Nebraska nursing facilities. MLTC has expressed concern that the current rate methodology in regulation does not take into consideration the quality of care and unintentionally disincentives efficiency. Modernizing the current cost-based methodology to one that incentivizes and rewards high-quality care and operational efficiency is a top priority for MLTC.

“Modernizing our payment model for nursing homes is a top priority for Medicaid," said Dr. Matthew Van Patton, director of the Division of Medicaid and Long-Term Care. “The healthcare delivery system is changing and so is the consumer. Our objective is to create a new model that reflects our times and is oriented to quality, a key factor for consumers."

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