Florida to Overhaul Skilled Nursing Medicaid Payment System by 2018

Florida Gov. Rick Scott signed into law this week a health care bill that will bring a prospective payment system (PPS) to skilled nursing providers for Medicaid, but a statewide trade group says it has several issues with the legislation that it hopes to address before it takes full effect in 2018.

Under the new law, the state will officially switch its Medicaid reimbursement policy from a cost-based system to progressive payments, which will provide skilled nursing facilities with a fixed, per-patient reimbursement based on median costs. Such a shift has been in the works since 2016, when the state commissioned a report from third-party consulting firm Navigant on how to best implement a PPS.

The resulting plan divided the Florida Health Care Association (FHCA), which largely supported Navigant’s proposal, and LeadingAge Florida, which deemed the proposed payment structure “fatally flawed” and asked for a “complete model redesign” that addressed the non-profit association’s concerns about regional differences in reimbursement amounts and certain quality metrics.

The FHCA then helped to address some of the issues in the original plan, according to Tom Parker, the Tallahassee, Fla.-based group’s director of reimbursement. Those changes included extending a proposed one-year “hold harmless” period for the PPS rollout to three; under the new law, providers will continue to receive the higher of the new or old payments until 2021, allowing them time to adapt to the new model.

“Nobody’s going to be negatively impacted for the next three years,” Parker said.

The FHCA also advocated to exempt government-operated facilities from the new law, as they are frequently required to take all patients and thus have less control over their census makeup, Parker said.

Florida’s legislature passed the compromise measure, with an altered Navigant plan becoming law — but not until September 1, 2018, allowing time for all parties to address the potential effects of the legislation.

The FHCA applauded the new law, with executive director Emmett Reed praising Scott for his leadership on the issue in a statement and Parker offering support for the legislation.

“We support the law as it is. We were very involved with the process of developing it,” Parker said.

LeadingAge Florida’s response was more measured.

“Ultimately, legislators made the wise decision to delay the implementation so we could look at some of the components of this plan in more detail,” LeadingAge Florida President and CEO Steve Bahmer told Skilled Nursing News.

Bahmer and the Tallahassee-based LeadingAge Florida have particularly taken issue with the PPS plan’s geographic structure, which divides the state into two sections: South, including Miami and the higher-income communities of Broward and Palm Beach counties, and North, encompassing the largely rural remainder of the state. Under the plan, skilled nursing Medicaid reimbursements would be tied to the median costs of care in each section.

But within the North region exist areas with generally higher costs of living, such as Fort Myers and Sarasota — and pegging their Medicaid reimbursements to a median figure that includes lower-cost rural areas would represent an undue budget cut for some providers, Bahmer said.

“Higher-preforming nursing homes would take major cuts under those formulas,” Bahmer said, noting that the South section includes just five out of Florida’s 67 total counties. “It uses the median from 62 counties, even though those 62 counties are not similar from a cost-of-living standpoint.”

Parker pointed out that the FHCA worked to include additional counties in the southern region during the initial reworking of the bill.

But Bahmer and LeadingAge have called on the state to break the state into five payment regions to better reflect the diversity of Florida’s socioeconomic landscape. The organization also wants the state to ensure that increased Medicaid funding under the law goes toward quality and care improvements — and not other expenses such as property acquisitions and executive salaries — and guarantee that lawmakers are indeed committed to fully funding the law throughout the initial three-year transition period.

“We just think it’s in the public interest that those dollars be spent on quality and care improvement,” Bahmer said.

Written by Alex Spanko

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