Nursing Facility Reimbursement Rate Setting

The bill adjusts the supplemental medicaid payment rates a qualifying nursing facility receives from the department of health care policy and financing (state department).

Current law limits the annual increase of the general fund share of the aggregate statewide average of the per diem rate to not more than 3%. The bill removes this limitation and requires the general fund share be calculated based on specific percentage increases.

The bill requires the state department to initiate a process no later than July 1, 2023, to remove the medicare costs from the provider rate setting by July 1, 2026.

The bill repeals the requirement that only such costs as are reasonable, necessary, and patient-related be reported for reimbursement purposes.

The bill authorizes the state department to require a nursing facility, as a condition of receiving medicaid funds, to submit any documentation necessary to ensure the state's interest in transparency, stability, and sound fiscal stewardship.

As part of developing and implementing a transition plan to regulate nursing facility reimbursement, the bill requires the state department to:

• No later than July 1, 2026, define "nursing home reimbursement" and provide payments to nursing facilities;
• Engage with stakeholders regularly to seek input on any proposed methodology changes; and
• From November 1, 2023, to November 1, 2026, submit an annual report to the joint budget committee of the general assembly regarding the implementation process.

The bill requires the state department to issue additional supplemental payments to nursing facility providers with disproportionately high medicaid utilization, to facilities that are geographically critical to ensuring access to care, and to facilities that admit compassionate release individuals from the department of corrections.

Effective July 1, 2026, the bill repeals:

• The requirement that the state department exempt certain nursing facility providers from the provider fee;
• The process for providing a wage enhancement supplemental payment to eligible nursing home providers that pay their employees a wage of at least $15 per hour; and
• Requirements for issuing additional supplemental payments to nursing facility providers that meet certain requirements.
  (Note: This summary applies to this bill as introduced.)