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.