2014 -- S 2348

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LC003526

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO HUMAN SERVICES -- MEDICAL ASSISTANCE

     Introduced By: Senators Lynch, and Miller

     Date Introduced: February 12, 2014

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 40-8-19 of the General Laws in Chapter 40-8 entitled "Medical

Assistance" is hereby amended to read as follows:

     40-8-19. Rates of payment to nursing facilities. -- (a) Rate reform.

      (1) The rates to be paid by the state to nursing facilities licensed pursuant to chapter 17

of title 23, and certified to participate in the Title XIX Medicaid program for services rendered to

Medicaid-eligible residents, shall be reasonable and adequate to meet the costs which must be

incurred by efficiently and economically operated facilities in accordance with 42 U.S.C. section

1396a(a)(13). The executive office of health and human services shall promulgate or modify the

principles of reimbursement for nursing facilities in effect as of July 1, 2011 to be consistent with

the provisions of this section and Title XIX, 42 U.S.C. section 1396 et seq., of the Social Security

Act.

      (2) The executive office of health and human services ("Executive Office") shall review

the current methodology for providing Medicaid payments to nursing facilities, including other

long-term care services providers, and is authorized to modify the principles of reimbursement to

replace the current cost based methodology rates with rates based on a price based methodology

to be paid to all facilities with recognition of the acuity of patients and the relative Medicaid

occupancy, and to include the following elements to be developed by the executive office:

      (i) A direct care rate adjusted for resident acuity;

      (ii) An indirect care rate comprised of a base per diem for all facilities;

      (iii) A rearray of costs for all facilities every three (3) years beginning October, 2015,

which may or may not result in automatic per diem revisions;

      (iv) Application of a fair rental value system;

      (v) Application of a pass-through system; and

      (vi) Adjustment of rates by the change in a recognized national nursing home inflation

index to be applied on October 1st of each year, beginning October 1, 2012. This adjustment will

not occur on October 1, 2013, but will resume on October 1, 2014. Said inflation index shall be

applied without regard for the transition factor in subsection (b)(2) below.

     (b) Stability and predictability of acuity adjustment. - In order to assure that nursing

facility reimbursement is directly and predictably tied to fluctuations in resident acuity levels, the

acuity adjustment described in subsection (a)(2)(i) above shall be applied using a fixed standard,

that is applied uniformly, from month to month, without being subject to variation for purposes of

spending levels or budget neutrality.

     (b)(c) Transition to full implementation of rate reform. - For no less than four (4) years

after the initial application of the price-based methodology described in subdivision (a) (2) to

payment rates, the executive office of health and human services shall implement a transition plan

to moderate the impact of the rate reform on individual nursing facilities. Said transition shall

include the following components:

      (1) No nursing facility shall receive reimbursement for direct care costs that is less than

the rate of reimbursement for direct care costs received under the methodology in effect at the

time of passage of this act; and

      (2) No facility shall lose or gain more than five dollars ($5.00) in its total per diem rate

the first year of the transition. The adjustment to the per diem loss or gain may be phased out by

twenty-five percent (25%) each year; and

      (3) The transition plan and/or period may be modified upon full implementation of

facility per diem rate increases for quality of care related measures. Said modifications shall be

submitted in a report to the general assembly at least six (6) months prior to implementation.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO HUMAN SERVICES -- MEDICAL ASSISTANCE

***

     This act would apply a fixed standard to determine the adjustment based on resident

acuity to the direct care rate paid by the state to nursing facilities under Medicaid.

     This act would take effect upon passage.

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LC003526

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