2016 -- H 7547

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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: Representatives Slater, Diaz, Carnevale, O'Brien, and Palangio

     Date Introduced: February 10, 2016

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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

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Assistance" is hereby amended to read as follows:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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      (iii) A rearray reassessment of costs for all facilities every three (3) years beginning

 

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October, 2015, which may or may not result in automatic per diem revisions;

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      (iv) Application of a fair rental value system;

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

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

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

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not occur on October 1, 2013 or October 1, 2015, but will occur on April 1, 2015. Said inflation

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

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

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

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

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

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include the following components:

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

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

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time of passage of this act; and

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

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

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

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

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thereafter; and

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

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

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

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

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

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

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

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

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

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

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

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

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

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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

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

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

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

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

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

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

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

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

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(6) month period is to be completed.

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     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

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

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

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

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

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

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

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

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

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     This act would take effect on July 1, 2016.

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