Chapter 304

2012 -- H 7580 SUBSTITUTE A

Enacted 06/20/12

A N A C T

RELATING TO HUMAN SERVICES - MEDICAL ASSISTANCE

Introduced By: Representatives Gallison, San Bento, Serpa, Silva, and Blazejewski

Date Introduced: February 15, 2012

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 department of 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 department of 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. 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 department 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.

(3) By no later than January 1, 2012, under the direction of the Secretary of Health and

Human Services, the Department of Human Services shall modify the principles of

reimbursement to include the acuity needs of patients and the relative Medicaid occupancy as a

factor in determining the reimbursement rates to nursing facilities.

(b) Phase I Implementation. The department shall file a state plan amendment with the

U.S. Department of Health and Human Services on or before November 1, 2011 to modify the

principles of reimbursement for nursing facilities, to be effective on January 1, 2012, or as soon

thereafter as is authorized by an approved state plan amendment, to establish price based payment

rates for nursing facilities, recognizing patient acuity and Medicaid occupancy.

SECTION 2. This act shall take effect upon passage.

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LC01441/SUB A

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