2016 -- S 2521

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LC004673

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO HUMAN SERVICES -- MEDICAL ASSISTANCE

     Introduced By: Senators Goldin, Satchell, Pichardo, Pearson, and Metts

     Date Introduced: February 25, 2016

     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. §

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. § 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 reassessment 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 or October 1, 2015, but will occur on April 1, 2015. 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. An adjustment to the per diem loss or gain may be phased out by

twenty-five percent (25%) each year; except, however, for the year beginning October 1, 2015,

there shall be no adjustment to the per diem gain or loss, but the phase out shall resume

thereafter; 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.

      (4) Notwithstanding any law to the contrary, for the twelve (12) month period beginning

July 1, 2015, Medicaid payment rates for nursing facilities established pursuant to this section

shall not exceed ninety-eight percent (98%) of the rates in effect on April 1, 2015.

     (5) For the state fiscal year ending June 30, 2017, the executive office of health and

human services shall establish a supplemental rate add-on to the Medicaid payment rates for

nursing facilities in the amount of two million, five thousand, nine hundred seventy-eight dollars

($2,005,978) with the express intent that the monies appropriated pursuant to this section be

dedicated to increase wages for direct care workers. Not less than one million, nine hundred five

thousand, six hundred seventy-nine dollars and ten cents ($1,905,679.10) or ninety-five percent

(95%) of this supplemental rate, shall be expended to fund a rate add-on for wages, benefits and

related employee costs of direct care staff of nursing homes. For purposes of this section, direct

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care staff shall include, but not be limited to, certified nurse aids (CNA) certified medical

technicians (CMT) housekeeping staff, laundry staff, and dietary staff. As defined herein, any

amount of this supplemental Medicaid payment rate not expended for these reasons shall be

subject to retroactive repayment to the state during the two (2) six (6) month base periods

described herein. In order to determine that the amounts provided in the interim per diem are

expended on labor related costs, each participating nursing facility shall submit a six (6) month

labor report, on forms provided by the rate setting unit of the executive office of health and

human services, for the six (6) month periods ending December 31, 2016 and June 30, 2017. Said

six (6) month report(s) shall be filed no later than ninety (90) days from the date in which the six

(6) month period is to be completed.

     SECTION 2. This act shall take effect on July 1, 2016.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO HUMAN SERVICES -- MEDICAL ASSISTANCE

***

     This act would establish a supplemental rate add on to the Medicaid payment rates for

nursing facilities in the amount of two million, five thousand, nine hundred seventy-eight dollars

($2,005,978), of which not less than ninety-five percent (95%) shall be used to increase wages for

direct care workers, including certified nurse aides, certified medical technicians, housekeeping,

laundry staff and dietary staff. Any amount of the supplemental Medicaid payment rate not

expended would be subject to retroactive repayment to the state. Nursing facilities participating

would be required to submit reports to the office of health and human services. It would also

replace the word "rearray" in section (a)(1)(iii) with "reassessment."

     This act would take effect on July 1, 2016.

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LC004673

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