On Monday Feb. 4, 2013, Gov. Kasich released The State of Ohio Executive Budget for Fiscal Years 2014 – 2015 that continues his momentum to reform Medicaid, taxes, and school funding. Below are highlights that impact senior care providers:
FY 2014-2015 budget impact – Medicaid to grow 13.3 percent to $22.4 billion in FY 2014 and 4.5 percent to $23.4 billion in FY 2015
Due to the federal Patient Protection and Affordable Care Act (PPACA) and Gov. Kasich’s decision to extend Medicaid eligibility, the state estimates an increase in Medicaid spending by $852 million in FY 2014 and $1.3 billion in FY 2015. To balance this increase, the Governor looks to initiate savings and cost avoidance measures of $1.3 billion, mostly coming from health plans and hospitals. Below are some specifics on how the Governor proposes to impact senior care & living providers:
Skilled nursing home impact
- No increases to current price-based rate structure and continued flat rate pricing for residents grouping in PA1/PA2 RUG groups.
- Facilities located in Stark and Mahoning counties will be moved to CSA-2(L) or (S). The total estimated impact for these 59 facilities is $25 million. Below is the average impact for facilities located in those counties.
If you are located in one of these counties and would like to know your individual impact, please call your Plante Moran representative.
- While some of the 20 quality indicators will be upgraded, facilities will still need to obtain five out of 20 quality measures to earn the maximum quality incentive as long as providers earn at least one clinical quality point.
- Critical access funding will be continued for qualifying facilities located in federal empowerment zones. The only change is that the facilities must earn the maximum quality incentive described above.
- The reimbursement portion covering custom wheelchairs that is currently included in the direct care price will be removed. While this is a high-level estimate, we believe direct care prices will be reduced by $0.32, which results in a reduction of $12 million as indicated below:
- Nursing home monitoring will be optimized by (1) improved responses to the plan of corrections related to deficiency surveys, (2) creating consistent standards for specialized units, and (3) making the licensure process more focused on patient needs.
- Payment incentives are being provided to rebalance post-acute care from inpatient rehab hospitals and long-term care hospitals to skilled nursing facilities.
- The personal needs allowance is being increased from $40 to $45 per month in CY 2014 and $50 per month in FY 2015.
Home and community-based services impact
- Spending for Medicaid aide and nursing services is being increased by 3 percent in FY 2015.
- Adult day care rates are being increased by 20 percent for PASSPORT and Choices Programs to mirror the current rates for ADC in Medicaid’s Home Care Waiver.
- The daily rate for a caregiver living with a consumer is being limited.
- A shared savings initiative for home health is being implemented by reducing avoidable admissions to hospitals and nursing homes.
- The state is committing to the Balancing Incentive Payments Program (BIPP), whereby Ohio can earn $70 million in additional federal funds through the BIPP.
- Safety in home care is being improved by ensuring direct care workers meet core competency standards.
- The Recovery Requires Community Program is being implemented and will (1) allow money to follow the person from a nursing home into the community, (2) increase access for affordable housing, (3) improve care coordination, and (4) reduce inappropriate admissions into nursing homes.
ICF/IID providers impact
- Ohio Medicaid will now be authorized to pay a flat rate for all individuals classified in the lowest acuity to encourage providers to consider placement in home and community-based settings. The budget did not specify an amount, but we believe it is effective FY 2015.
- Financial incentives are being provided to convert ICF beds to HCBS waiver services.
- Rates for HCBS waiver providers are being increased by $2.08 per hour for those who care for individuals previously residing in a public hospital, developmental center, or converted ICF home.
- Local county boards are being encouraged to create employment first policies via a new employment first line item in the DODD budget.
- Access to autism services is being improved by providing $100,000 to the Ohio Center for Autism and Low Incidence (OCALI) to provide technical assistance to the Interagency Workgroup on Autism (IWGA).
Other non-institutional providers impact
- Medicare Part B crossover payments are being limited to the Medicaid maximum, rather than the full Medicare share.
- Electronic prescribing is being increased to better access Medicaid eligibility and drug prescribing policies.
- Payments for multiple MRIs and other imagings are being reduced.
- Medicaid payments to certain providers for services delivered outside their normal practice are being limited.
- Enhanced reimbursement for a single clinic located in an underserved area of the state is being eliminated.
How Plante Moran can help
Clearly the Governor’s budget will continue to transform Ohio’s Medicaid program from the current fragmented care settings to better care coordination where vulnerable citizens can receive quality care in the lowest cost settings. That being said, we are here to help you strategically assess your ability to meet healthcare reform by offering HCBS services, ICF/IID waiver conversion analysis, health home start-ups, and post-acute care strategies.