CMS Approves Indiana’s Nursing Facility State Plan Amendment

On May 23rd, 2012, CMS provided notice to Indiana Medicaid that CMS had approved the State Plan Amendment (SPA) submitted by the State in October of 2011.  The SPA was submitted as a result of the 2011 State Budget bill that called for maximization of Indiana’s Nursing Facility Quality Assessment Fee (QAF).  IHCA supported the effort to maximize the QAF in order to increase reimbursement to nursing facilities and to fund Phase III of the nursing facility quality add-on that will move away from sole dependence on the Report Card Score to a Value Based Purchasing methodology comprised of 12 quality metrics.

IHCA is working to obtain details on the implementation plan for the SPA, specifically to ensure that re-processing of the entire fiscal year’s claims is done correctly and to avoid creation of cash flow issues to nursing facilities.  Due to the State having submitted the SPA after October 1, 2011, many of the benefits from the SPA impact claims made as of October 1, 2011 and forward.  This means that while the QAF will be increased retroactive to July 1, 2011, benefits will not be seen in claims from that first quarter of the fiscal year.

The benefits that will be realized in State Fiscal Year 2012 from the approved SPA include an increase to the Quality Assessment Add-on (by virtue of the increase in the QAF), an increased maximum Report Card Score Add-on, a 75-cent add-on to the Administrative Component to recognize a portion of previously disallowed costs related to direct patient care and patient care supports, and a separate increases to the Administrative Component to 110% in 2012 and 108% in 2013.

In addition, starting July 1, 2012 (State Fiscal Year 2013), the approved SPA will permit reimbursement for the following previously disallowed costs:
• Educational seminars for administrative, direct and indirect care staff
• Support license fees for general and administrative software and hardware
• Support and license fees for software used in hands-on resident care
• Rental costs for low air loss mattresses and pressure support devices and oxygen concentrators up to $1.50 PPD
• Denture replacement costs that exceed current Medicaid expenditure limitations
• Legend and non-legend sterile water for any purpose
• Cable or satellite TV
• Pets, pet supplies, maintenance and vet expenses
• Costs related to non-ambulance travel and transportation of residents

The approved SPA will also increase the capitalization threshold from $500 to $1,000.
As details become available regarding implementation of the SPA and retroactive adjustment of claims from State Fiscal Year 2012, IHCA will update member facilities.

If you have questions, please contact Zach Cattell at zcattell@ihca.org or 317-616-9001.

Changes to Nursing Home Compare & 5-Star Expected This Year

AHCA recently notified State Affiliates of a meeting between CMS and stakeholder groups regarding upcoming changes to Nursing Home Compare and the 5-Star Rating.  AHCA reported the following:

Upcoming changes to the Nursing Home Compare website, expected to be implemented this summer, in addition to updating the look, feel and some functionalities of the website,  include:

•    Posting of survey deficiency reports (2567 forms), beginning for surveys conducted in calendar year 2011.  Until CMS has access to Plans of Correction electronically, anticipated in 2014, this information will not be reflected on the website.
•    Reporting on the new MDS 3.0-based quality measures, including 2 new measures of off-label use of antipsychotic drugs (long-stay prevalence and short-stay incidence)
•    Inclusion of ownership information.
•    Reporting on physical therapist staffing levels.

Longer-term considerations for future enhancements currently in the early phases of exploration include reporting on special capabilities and services offered by facilities to better support consumer identification of facilities that can meet specialized needs and reporting of consumer satisfaction information.  No information was provided as to the expected timeline for potential incorporation of these data.


The Five-Star Rating system will also be modified this summer to incorporate the new quality measures and adjust expected staffing calculations based on MDS 3.0 data.  The approach to revising these measures and calculations has been designed to transition with minimal change to the overall distribution of ratings. CMS also reported that overall trends in Five-Star ratings since the debut of the system in 2008 have shown improvement, with an increasing proportion of facilities receiving 4- and 5-star ratings and fewer receiving 1-star ratings.

IHCA will continue to provide updates as CMS shares additional information and firms up their timeline for rolling out these changes.  Provider preview reports are currently available via the CASPER system.

Smoking Ban Guidance

House Enrolled Act 1149, Indiana’s Statewide Smoking Ban, becomes effective on July 1, 2012. The ban applies to most places of employment and public places, including nursing homes and assisted living facilities.  IHCA has developed a guidance document for members’ reference when implementing changes to their smoking policies in light of the new law. Click on the link to the Members Only section of the IHCA website to view this document.

Please contact Zach Cattell at zcattell@ihca.org or 317-616-9001 for additional information or with questions.

CMS Issues Inpatient Hospital and LTCH Proposed Rules

The Centers for Medicare & Medicaid Services has issued a proposed rule that would update Medicare payment policies and rates for inpatient stays to general acute care hospitals paid under the Inpatient Prospective Payment System (IPPS), and long-term care hospitals (LTCHs) paid under the LTCH Prospective Payment System. 

In the proposed rule,  CMS projects that general acute care hospital payment rates will increase by 2.3 percent in FY 2013.  The 2.3 percent is a net update after inflation, improvements in productivity, a statutory adjustment factor, and adjustments for hospital documentation and coding changes.   Payments for IPPS hospitals are expected to increase by approximately 0.9 percent or $904 million in FY 2013.  CMS also projects that LTCH payments will increase by approximately $100 million or 1.9 percent.

The proposed rule makes a number of changes to payment policies and rates, including:

• Adding the Medicare spending per beneficiary measure to the Hospital VBP Program, which would affect all Part A and Part B payments beginning in FY 2015;

• Establishing a new methodology and the payment adjustment factors for excess readmissions for heart attack, heart failure and pneumonia, and

• Several changes to the LTCH payment system that would:
oExtend the existing moratorium on the “25 percent threshold” policy for one year;

o Apply a 1.3 percent reduction to the first year of a proposed three-year phase-in of a budget neutrality adjustment, so that the proposed adjustment will not apply to discharges occurring on or before Dec. 28, 2012; and,

o Include the IPPS comparable amount payment option for discharges occurring on or after Dec. 29, 2012 in Medicare payments for very short stays in LTCHs.  

To read the press release and fact sheets, go to:  http://www.cms.gov/Newsroom/Newsroom-Center.html.

The proposed rule can be downloaded from the Federal Register at: http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1.