UPL Program

On November 5, the State held a meeting with the executives of the Non-State Government Owned (NGSO) Nursing Facilities regarding the UPL program.  The three nursing home trade associations were also present at the meeting.  Two issues were addressed.

How the UPL is Calculated
The State had previously discussed the possibility of moving the UPL payment to a facility specific payment versus the current average, pooled amount effective October 1, 2012.  Due to some pushback by certain providers, it was thought that the implementation date would be delayed.  However, the State informed everyone that they will implement this change effective October 1, 2012.  Three documents that discuss and describe the UPL calculation change are available in the Member's Only section of the IHCA website.

To accomplish the calculation change, a State Plan Amendment (SPA) will be filed soon.  If the SPA is not approved by CMS by February 15, 2013, the State will pay the October 1, 2012 – December 31, 2012 interim UPL payment based on the current pooled methodology.  The State would then settle up on the Final June 30, 2013 payment.  The State will calculate quarterly facility-specific UPL payment amounts for all Providers in the UPL program, even for interim payments effective with the October 1, 2012 – December 31, 2012 quarter.  One provider is pushing for a delay to  the January 1, 2012 rate effective date, but it is unclear if a delay will be granted.

How the UPL Money is Distributed
The State is concerned that the growth of the UPL program will cause CMS to investigate the Program and potentially eliminate it.  The State also said that it is concerned that the growth of the UPL program has not had quality care in mind.  To be in front of this, the State initially proposed the following to be effective July 1, 2013:

• 50% of the UPL payments will be distributed as they are today to County Hospitals
• 49.5% of the UPL payments will be put into a Quality Pool and be paid to all Medicaid certified nursing facilities (Not just Providers in the UPL program) based performance within the proposed Phase III – Value Based Purchasing Add-on.
     o When asked, the State did not know how much money this would add to the VBP Add-on.
• .5% of the UPL payments will go to the State to pay for the administration of the UPL Program.

The proposal was met with a number of questions from hospital representatives regarding the fairness of the proposal, where non-participating UPL facilities would have access to UPL funds through a quality payment.  IHCA voiced concern about plowing a potentially vast sum of funds into the VBP Add-on as it is currently designed due to concerns already voiced by IHCA regarding the methodology and the fact that many initiatives that could improve quality would be missed if only the VBP add-on was utilized.

Based on the robust discussion, the State said that the proposal would probably not be effective July 1, 2013, that the split of funds above is not set in stone, and that providers should forward comments and questions to the State.  Those that IHCA has talked to since that meeting agree that the proposal was the opening salvo in a longer discussion on a quality metric program paid for by UPL funds.
IHCA staff has already informed the Board of Directors of this proposal and will be taking further direction from the Board on next steps.  IHCA is also coordinating with the Indiana Hospital Association to ensure that both organizations are on the same page.

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