CMS Approves Value Based Purchasing

CMS issued an approval letter dated December 5, 2013 notifying Indiana Medicaid that the Value Based Purchasing (VBP) methodology for nursing facility reimbursement had been approved (click here to read the approval letter).  The newly approved State Plan Amendment will be implemented retroactively to July 1, 2013.  Meyers & Stauffer, Indiana Medicaid’s rate setting contractor, is currently calculating each nursing facilities’ VBP score based upon the prior year cost report and Schedule X of the cost report.  Once calculations are complete, nursing facilities will begin to receive notice of the claims reprocessing process on and after July 1, 2013.  IHCA has asked Indiana Medicaid to be mindful of potential cash-flow issues if claims reprocessing results in significant overpayments (an overpayment because the facility fared worse under the VBP methodology than it did under prior methodology).  In past claims reprocessing events, Indiana Medicaid has been able to stagger implementation to minimize the impact of significant overpayments.

The VBP program has been in the works for 3 years and is now approved.  To read more detail about the VBP program, click here.  Changes to the VBP methodology in the future are likely to include satisfaction survey measures and MDS Quality Metrics, although how to include either of those types of data is not decided.  IHCA continues to engage Indiana Medicaid and the Division of Aging on those issues.  Any future change to the VBP methodology is not expected until July 1, 2015.