2012 Session

Budget Amendments - HB30 (Member Request)

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Chief Patron: Ingram
Co-Patron(s): Edmunds, Kilgore, Lewis, Morefield, O'Bannon
Nursing Home Reimbursement-Eliminate 90% Occupancy Std. for Indirect & Plant Costs

Item 307 #3h

Item 307 #3h

First Year - FY2013 Second Year - FY2014
Health And Human Resources
Medical Assistance Services, Department of FY2013 $2,923,774 FY2014 $2,923,774 GF
FY2013 $2,923,774 FY2014 $2,923,774 NGF

Page 225, line 49, strike "$7,438,749,436" and insert "$7,444,596,984".
Page 225, line 49, strike "$9,042,320,948" and insert "$9,048,168,496".
Page 239, after line 5, insert:
"LLL.  The Department of Medical Assistance Services shall amend the State Plan for Medical Assistance to increase the reimbursement rates in the current nursing facility operation payment system to eliminate the occupancy standard of 90 percent for indirect and plant costs, effective July 1, 2012.  The Department shall have the authority to promulgate emergency regulations to implement this change within 280 days or less from the enactment date of the act."

(This amendment adds $2.9 million from the general fund and $2.9 million from federal Medicaid matching funds each year of the biennium to eliminate the 90 percent occupancy standard used in calculating nursing home reimbursement rates for indirect care and plant costs. Currently, nursing home per diem payments are calculated by dividing the total Medicaid reimbursable cost by the number of Medicaid resident days. This number is then adjusted by an occupancy rate factor, which is determined by the average number of daily residents in a facility compared to the total number of beds in such facility. For facilities with less than 90% occupancy, this results in a lower per diem amount. Currently 89 of 259 nursing facilities have capacities below 90 percent. The occupancy rate adjustment was originally intended to reduce inefficiency of facilities with lower occupancy whose costs per resident are higher than those facilities that are able to spread out costs among more residents. However, with the growth in community based care and assisted living facilities, occupancy levels in nursing facilities are declining, however the cost of caring for these higher need residents is increasing.)