NF Capacity Reduction Update

Throughout the year 2015 IHCA has been in discussion with the Indiana Family and Social Services Administration (FSSA), as well as the two other nursing facility trade associations Leading Age Indiana (LAI) and Hoosier Owners and Providers for the Elderly (HOPE), concerning the future of Long Term Care in Indiana. FSSA has emphasized the rebalancing of spending between institutional care and home and community based services (HCBS) using a 5 to 8 year plan. The effort to rebalance is driven by future budgetary concern and because the current Indiana ratio of spending is 67% on institutional and 33% on HCBS, whereas nationally spending is 51% institutional and 49% HCBS.

Although this conversation has been going on for many months, in recent weeks FSSA has included a proposal to incentive the closure of nursing facilities as a method for increasing overall operational efficiency and save long term dollars. The proposed incentive plan is to withhold some amount of the supplemental payments county hospitals currently receive and only give that withheld amount back if a targeted number of nursing facilities close. The proposal would be effectuated by changing the quarterly agreements that each county hospital signs with Indiana Medicaid when drawing down supplemental payments.

According to a report released by the Indiana State Department of Health (ISDH) in July 2015, there are 540 facilities with a total of 52,624 comprehensive beds in the state of Indiana, averaging 97 beds per facility. The report also found that statewide occupancy is at 75%. FSSA has a target statewide occupancy rate of 85-90%, which means the closure of 54-81 facilities total and about 15-25 facilities annually. IHCA agrees that there is a need to increase the occupancy rate and that reduction in capacity could be a part of that, but the FSSA proposal is very complicated and has generated many concerns from IHCA members and partners.

IHCA and LAI sent a letter to Chris Fletcher, OMPP Reimbursement Section Director of FSSA, on September 18, 2015 concerning the 5-8 year plan and the state’s idea concerning facility closure. The letter explained concerns with the FSSA proposal, as well as providing a proposed 5 to 8 year plan timeline and alternative concepts. To read the entire letter, please click here.

The state’s plan to rebalance is progressing rapidly after months of little action. This rebalancing plan will have a major impact to the LTC community, please remain engaged for updates.   Please contact Zach Cattell at zcattell@ihca.org or 317-616-9001 for more information.