PUBLIC NOTICE: Public Comment Period for Medicaid Payment Rates for Nursing Facilities

The Iowa Department of Human Services (DHS), pursuant to the requirements outlined in 42 C.F.R. §447.205, hereby gives notice of the following proposed action regarding changes to the nursing facility per diem rates utilizing current cost report data under the State Plan under Title XIX of the Social Security Act Medical Assistance Program (Medicaid).

Pursuant to the authority of 2021 Iowa Acts, House File (HF) 891, Section 31, the Department shall not rebase case-mix nursing facility rates, but shall instead reimburse case-mix nursing facilities by adjusting the nursing facility case-mix adjusted rates that were effective July 1, 2019, using the mid-points of each of the most recent cost reports submitted by the nursing facility for the period ending on or before December 31, 2018, and inflating these costs forward applying the inflation factor as determined using the latest available quarterly publication of the HCFA/SNF index, to the extent possible within the state funding, including the $954,043 provided for this purpose.

This proposed State Plan Amendment (SPA) IA-21-0014 will amend Attachment 4.19-D to change the date of the cost report used for the rate calculation and the inflation factor for rates beginning July 1, 2021.

Nursing facilities are reimbursed based on a modified price-based system with quarterly adjustments to reflect changes in case-mix (acuity) of Medicaid members residing in the nursing facility. Nursing facility rates are rebased every second year beginning July 1, 2001, to reflect more current cost information on a biannual basis with an effective date of July 1 of each odd numbered year.

Iowa Medicaid calculates prospective per diem rates for nursing facilities and applies an inflation factor to allowable costs. The current approved inflation factor in Attachment 4.19-D of the Medicaid State Plan is from the midpoint of the cost report period to January 1, 2016.

Per diem rates for nursing facilities effective July 1, 2021, will continue to be based on cost reports submitted by the nursing facilities for fiscal year ends during calendar year 2018.

Estimated payments to nursing facilities cannot exceed amounts appropriated by the legislature. The inflation factor will be changed to ensure that the amounts estimated using 2018 cost information, estimated resident days and client participation will not exceed the appropriation. Once data is available from nursing facility cost reports with Fiscal Year end December 31, 2018 or earlier, the specific amount of inflation will be calculated and the SPA filed.

This reimbursement and policy change is estimated to increase overall Iowa Medicaid expenditures by $2.5 million (total, state and federal funds) per year.

DHS is proposing the above changes in order to comply with HF 891.

Fiscal Impact