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Hospice Payment Included in Nursing Facility Quality Bill

Last Tuesday, Director of Public Policy Katie Rogers testified before the Ohio Senate Finance Committee on behalf of LeadingAge Ohio on Senate Bill 264, introduced on Nov. 28 to establish Medicaid nursing facility quality payments beginning July 2012. The bill, sponsored by Senator Shannon Jones (R-Springboro), spells out the twenty quality measures, of which nursing facilities must meet five (5) in order to receive the full quality payment of $16.44. Jones and Director Greg Moody of the Office of Health Transformation both testified that it is the intent of the legislation that all nursing facilities meet the five quality points to receive the full payment, which is budgeted at $300 million total. Click here to read Director Moody’s testimony.

In her testimony, Katie stressed that while LeadingAge Ohio was part of the subcommittee to create the quality measures and does support the legislation, it is their position that this is only the first step in establishing meaningful quality measures and hopes to continue to work with providers and the administration in order to so. Click here to read Katie’s testimony.

The bill replaces the current quality “bonus” payment incentives in Medicaid law. Midwest Care Alliance has been working with representatives from the Ohio Department of Job and Family Services (ODJFS) and the Office of Health Transformation (OHT) to ensure that the new quality incentive payment of $16.44 is a component of the (hospice) room and board rate. Because, pursuant to federal law, the hospice room and board payment is equal to 95% of the Medicaid rate for nursing facility services, the new quality incentive payment will also be reflected proportionately in payments to hospice providers for room and board when they are serving individuals residing in nursing facilities. Similarly, the Medicaid fee for service rates which will include the quality incentive payment are considered by the actuary in establishing the capitation rate paid to managed care plans. 

This new quality payment system has caused some confusion around the potential loss of quality payment to nursing facilities when hospice is involved. While nursing facilities will continue identify their qualified days similarly to how they currently identify them, the $3.29 that is currently calculated by Medicaid is a bonus on top of the room and board rate. This legislation would change the quality payment, beginning July 1, 2012, so that the calculated payment is actually incorporated into the room and board rate. If a nursing facility fails to meet the full five (5) points of the quality measure, it will reduce their room and board payment proportionately up to the $16.44 per day maximum allocation. With the quality payment embedded in the room and board rate structure, this ensures that the hospice room and board rate will be inclusive of whatever particular nursing facility quality rate paid to the hospice at the standard 95% rate.

The bill was voted out of committee and unanimously passed by the Senate on November 30, and this week had one hearing in the Ohio House. At the hearing, Rep. Barbara Sears (R-Sylvania) circulated an amendment for discussion purposes to change the distribution of any “bonus” payments—the leftover pool of quality payment amounts if some facilities failed to meet five (5) of the twenty quality measures for the full $16.44 quality payment. She said the amendment would require that, to qualify to receive any of the left-over money, a facility would have had to obtain at least one point in the clinical category of quality measures.

A second hearing in the Ohio House Finance and Appropriations Committee has been scheduled for December 13, and the legislation is expected to move quickly through the House as it did in the Senate. Director Moody asked in his testimony that the bill be passed by the end of the year so that the state can prepare to implement the measures by the start of fiscal year 2013, which is July 1, 2012.

You can read more about the bill and the Senate hearings in an article published last week by The Columbus Dispatch; click here to read the article. Midwest Care Alliance will continue to work with provider groups, the General Assembly, and the Administration to keep members informed about the quality payments and Medicaid reimbursement information. If you have any questions, contact Jeff Lycan or Katie Rogers.