NY’s Medicaid Cut ‘Will Without Question Damage’ Nursing Home Finances

A workgroup authorized by the state of New York predicted dire outcomes for the Empire State’s skilled nursing facilities in a statement and recommendations delivered to various state departments on Friday.

In the statement, the Nursing Home Acuity Workgroup described the planned change in methodology as “using unrepresentative resident assessment data.”

Specifically, the state Department of Health (DOH) is proposing to shift from using so-called “snapshots,” where it draws from resident Minimum Data Set (MDS) assessments around two dates in January and July, to a system where it uses all MDS assessments from August 8, 2018 through March 31, 2019.

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The goal is to realize $246 million in savings, but the workgroup argued that the Legislature gave no indication that it intended for the change to lead to such a cut based on a retroactive shift.

“A retroactive cut of this magnitude will without question damage the financial viability of numerous financially fragile nursing homes, endanger quality resident care, and put crucial health care jobs at risk,” the statement said.

The $246 million reduction stems from the fact that while New York would see net savings of $123 million, the loss of that money would lead to the forfeiture of federally matched dollars for Medicaid. SNF reimbursements in New York are already based on 2007 costs, and Medicaid providers have not received an inflation adjustment in more than a decade — which makes a cut of $246 million unsustainable, the workgroup argued.

On average, Medicaid rates would be cut by an average of at least $9.50 per Medicaid day, and the impacts at the facility level could be even more dramatic, the workgroup said. The cut would also call into question how well SNFs could meet recently arranged collective bargaining agreements, it argued.

The statement called out the DOH for not making the case-mix data and related analyses it conducted available for review, as well as not giving any explanation for the $246 million in estimated savings. In addition, the DOH choosing to not invoke a limit on case-mix changes — up or down — shows that it expects case-mix decreases of more than 5%, the statement said.

“We strongly urge the DOH to collaborate with the workgroup in order to develop the prospective acuity methodology the law requires, so as not to disrupt resident care or threaten the financial viability of skilled nursing providers,” the workgroup said in the statement.

The group’s recommendations included:

  • Freezing and applying the July 2018 case-mix index used in the rates for January 1, 2019, for the six-month rate periods starting this coming July 1 and on January 1, 2020
  • Using a quarterly calculation of all Medicaid MDS as a temporary methodology for the July 2020 rate period, one that would see the DOH using the quarterly average of all MDS for the six-month period from July 1 through December 31 of this year
  • Transitioning to the RUG-IV 48-Group model for the January 2021 rate period

“We urge the DOH to reconsider its proposed methodology for case-mix adjustments and respectfully request the state provide feedback to the workgroup regarding its recommendations as soon as possible, as July 1, 2019 is rapidly approaching,” the statement said in its conclusion.

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