2022 -- H 7860

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LC004883

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO HUMAN SERVICES -- MEDICAL ASSISTANCE

     

     Introduced By: Representatives Serpa, and C Lima

     Date Introduced: March 04, 2022

     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.

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     (a) Rate reform.

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

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title 23, and certified to participate in Title XIX of the Social Security Act for services rendered to

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Medicaid-eligible residents, shall be reasonable and adequate to meet the costs that 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 ("executive office") shall

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promulgate or modify the principles of reimbursement for nursing facilities in effect as of July 1,

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2011, to be consistent with the provisions of this section and Title XIX, 42 U.S.C. § 1396 et seq.,

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of the Social Security Act.

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     (2) The executive office shall review the current methodology for providing Medicaid

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payments to nursing facilities, including other long-term-care services providers, and is authorized

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to modify the principles of reimbursement to replace the current cost-based methodology rates with

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rates based on a price-based methodology to be paid to all facilities with recognition of the acuity

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of patients and the relative Medicaid occupancy, and to include the following elements to be

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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 of costs for all facilities every three (3) years beginning October, 2015, that

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may or may not result in automatic per diem revisions A rearray of costs for all facilities every

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three (3) years beginning October 2022 utilizing data from the most recent finalized year of facility

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cost report. The per diem rate components deferred in subsections (a)(2)(i) and (a)(2)(ii) of this

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section shall be adjusted accordingly to reflect changes in direct and indirect care costs since the

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pervious array;

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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 1 of each year, beginning October 1, 2012. This adjustment will not

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occur on October 1, 2013, October 1, 2014, or October 1, 2015, but will occur on April 1, 2015.

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The adjustment of rates will also not occur on October 1, 2017, October 1, 2018, and October 1,

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2019. Effective July 1, 2018, rates paid to nursing facilities from the rates approved by the Centers

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for Medicare and Medicaid Services and in effect on October 1, 2017, both fee-for-service and

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managed care, will be increased by one and one-half percent (1.5%) and further increased by one

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percent (1%) on October 1, 2018, and further increased by one percent (1%) on October 1, 2019.

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In addition to the annual nursing home inflation index adjustment, there shall be a base rate staffing

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adjustment of one-half percent (0.5%) on October 1, 2021, one percent (1.0%) on October 1, 2022,

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and one and one-half percent (1.5%) on October 1, 2023. The inflation index shall be applied

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without regard for the transition factors in subsections (b)(1) and (b)(2). For purposes of October

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1, 2016, adjustment only, any rate increase that results from application of the inflation index to

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subsections (a)(2)(i) and (a)(2)(ii) shall be dedicated to increase compensation for direct-care

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workers in the following manner: Not less than 85% of this aggregate amount shall be expended to

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fund an increase in wages, benefits, or related employer costs of direct-care staff of nursing homes.

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For purposes of this section, direct-care staff shall include registered nurses (RNs), licensed

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practical nurses (LPNs), certified nursing assistants (CNAs), certified medical technicians,

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housekeeping staff, laundry staff, dietary staff, or other similar employees providing direct-care

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services; provided, however, that this definition of direct-care staff shall not include: (i) RNs and

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LPNs who are classified as "exempt employees" under the federal Fair Labor Standards Act (29

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U.S.C. § 201 et seq.); or (ii) CNAs, certified medical technicians, RNs, or LPNs who are contracted,

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or subcontracted, through a third-party vendor or staffing agency. By July 31, 2017, nursing

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facilities shall submit to the secretary, or designee, a certification that they have complied with the

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provisions of this subsection (a)(2)(vi) with respect to the inflation index applied on October 1,

 

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2016. Any facility that does not comply with terms of such certification shall be subjected to a

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clawback, paid by the nursing facility to the state, in the amount of increased reimbursement subject

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to this provision that was not expended in compliance with that certification.

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     (3) Commencing on October 1, 2021, eighty percent (80%) of any rate increase that results

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from application of the inflation index to subsections (a)(2)(i) and (a)(2)(ii) of this section shall be

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dedicated to increase compensation for all eligible direct-care workers in the following manner on

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October 1, of each year.

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     (i) For purposes of this subsection, compensation increases shall include base salary or

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hourly wage increases, benefits, other compensation, and associated payroll tax increases for

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eligible direct-care workers. This application of the inflation index shall apply for Medicaid

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reimbursement in nursing facilities for both managed care and fee-for-service. For purposes of this

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subsection, direct-care staff shall include registered nurses (RNs), licensed practical nurses (LPNs),

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certified nursing assistants (CNAs), certified medication technicians, licensed physical therapists,

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licensed occupational therapists, licensed speech-language pathologists, mental health workers

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who are also certified nurse assistants, physical therapist assistants, housekeeping staff, laundry

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staff, dietary staff or other similar employees providing direct-care services; provided, however

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that this definition of direct-care staff shall not include:

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     (A) RNs and LPNs who are classified as "exempt employees" under the federal Fair Labor

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Standards Act (29 U.S.C. § 201 et seq.); or

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     (B) CNAs, certified medication technicians, RNs or LPNs who are contracted or

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subcontracted through a third-party vendor or staffing agency.

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     (4)(i) By July 31, 2021, and July 31 of each year thereafter, nursing facilities shall submit

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to the secretary or designee a certification that they have complied with the provisions of subsection

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(a)(3) of this section with respect to the inflation index applied on October 1. The executive office

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of health and human services (EOHHS) shall create the certification form nursing facilities must

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complete with information on how each individual eligible employee's compensation increased,

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including information regarding hourly wages prior to the increase and after the compensation

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increase, hours paid after the compensation increase, and associated increased payroll taxes. A

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collective bargaining agreement can be used in lieu of the certification form for represented

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employees. All data reported on the compliance form is subject to review and audit by EOHHS.

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The audits may include field or desk audits, and facilities may be required to provide additional

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supporting documents including, but not limited to, payroll records.

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     (ii) Any facility that does not comply with the terms of certification shall be subjected to a

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clawback and twenty-five percent (25%) penalty of the unspent or impermissibly spent funds, paid

 

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by the nursing facility to the state, in the amount of increased reimbursement subject to this

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provision that was not expended in compliance with that certification.

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     (iii) In any calendar year where no inflationary index is applied, eighty percent (80%) of

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the base rate staffing adjustment in that calendar year pursuant to subsection (a)(2)(vi) of this

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section shall be dedicated to increase compensation for all eligible direct-care workers in the

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manner referenced in subsections (a)(3)(i), (a)(3)(i)(A), and (a)(3)(i)(B) of this section.

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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 subsection (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. The transition shall include

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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 time

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of passage of this act; for the year beginning October 1, 2017, the reimbursement for direct-care

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costs under this provision will be phased out in twenty-five-percent (25%) increments each year

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until October 1, 2021, when the reimbursement will no longer be in effect; and

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

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

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five percent (25%) each year; except, however, for the years beginning October 1, 2015, there shall

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

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

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

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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-month (12) period beginning

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

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

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other provisions of this chapter, nothing in this provision shall require the executive office to restore

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the rates to those in effect on April 1, 2015, at the end of this twelve-month (12) period.

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     (c) Rearray adjustments. In the event the rearray described in subsection (a)(2)(iii) of this

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section is not performed as scheduled, nursing facility per diem rates shall be increased by three

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percent (3%) effective on the date that the rearray was scheduled to take place, which three percent

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(3%) increase shall be irrespective of and in addition to any inflation index applied pursuant to

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subsection (a)(2)(vi) of this section.

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     (d) Changes to state minimum wage. Notwithstanding any provision in this section to the

 

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contrary at any time when the state increases the required minimum wage pursuant to § 28-12-3 or

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successor statute, the direct care and indirect care components of the Medicaid rates to be paid by

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the state to nursing facilities under subsections (a)(2)(i) and (a)(2)(ii) of this section shall be

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increased by the same percentage by which the minimum wage is increased. Such adjustment shall

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become effective on the date that the minimum wage increase becomes effective, and shall take

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place irrespective of and in addition to any inflation index applied pursuant to subsection (a)(2)(vi)

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of this section.

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     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 the executive office of health and human services to adjust, once

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every three (3) years the per diem reimbursement to nursing facilities, by taking into consideration

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increases in direct and indirect care costs. If the scheduled adjustment does not occur, the per diem

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reimbursement rate shall increase by three percent (3%) as of the date of the scheduled adjustment.

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     This act would take effect upon passage.

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