2020 Session

Budget Amendments - HB30 (Conference Report)

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Residential Psychiatric Facility Rates

Item 313 #44c

Item 313 #44c

First Year - FY2021 Second Year - FY2022
Health and Human Resources
Department of Medical Assistance Services FY2021 $7,599,696 FY2022 $7,599,696 GF
FY2021 $7,599,696 FY2022 $7,599,696 NGF

Page 294, line 18, strike "$15,939,731,997" and insert "$15,954,931,389".
Page 294, line 18, strike "$17,038,007,934" and insert "$17,053,207,326".

Page 302, strike lines 25 and 26, and insert:

"CC.  Effective July 1, 2020, the Department of Medical Assistance Services shall amend the State Plan for Medical Assistance to revise per diem rates paid to Virginia-based psychiatric residential treatment facilities using the provider's audited cost per day from the facility's cost report for provider fiscal years ending in state fiscal year 2018. New Virginia-based residential psychiatric facilities must submit proforma cost report data, which will be used to set the initial per diem rate for up to two years. After this period, the department shall establish a per diem rate based on an audited cost report for a 12-month period within the first two years of operation. Virginia-based residential psychiatric facilities that do not submit cost reports shall be paid at 75 percent of the established rate ceiling. If necessary to enroll out-of-state providers for network adequacy, the department shall negotiate rates. If there is sufficient utilization, the department may require out-of-state providers to submit a cost report to establish a per diem rate. In-state and out-of-state provider per diem rates shall be subject to a ceiling based on the statewide weighted average cost per day from fiscal year 2018 cost reports. The department shall have the authority to implement these changes effective July 1, 2020 and prior to the completion of any regulatory process undertaken in order to effect such change."


(This amendment provides $7.6 million from the general fund each year and a like amount of federal Medicaid matching funds to increase reimbursement to residential psychiatric facilities. The rates paid to these facilities, not unlike other institutional providers (hospitals, nursing facilities, etc.), have not increased since 2008 and have not been adjusted for inflation. These facilities serve only children in a clinically and medically-necessary active treatment program designed to provide necessary support and address mental health, behavioral, substance abuse, cognitive and training needs in order to prevent or minimize the need for more intensive outpatient treatment, per federal regulations. This amendment also strikes language that prohibits annual inflation adjustments.)