2014 -- S 2971

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LC005382

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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: Senator Michael J.McCaffrey

     Date Introduced: May 01, 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) 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.

     (c) Inflation index. – The annual adjustment to rates by the change in a recognized

national nursing home inflation index as described in subsection (a)(2)(vi) of this section shall be

applied to any and all rates of payment to nursing facilities made in return for Medicaid-covered

services, regardless whether those rates are paid directly by the state or by a managed care

organization, licensed health insurer, or other entity acting pursuant to a contract or other

arrangement between such entity and the state. Any such contract between the state and a

managed care organization, licensed health insurer, or other entity shall include a provision

requiring that rates of payments to nursing facilities be so adjusted.

     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

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     This act would require that a recognized national nursing home inflation index be applied

to any annual adjustment to rates of payment to nursing facilities for Medicaid-covered services

regardless of who the rates are paid by. The act would also provide that any contracts between the

state and an applicable entity provide that rates of payment to nursing facilities be adjusted as

such.

     This act would take effect upon passage.

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LC005382

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