2013 -- S 0752

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LC02091

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO HUMAN SERVICES - MEDICAL ASSISTANCE

     Introduced By: Senators Lynch, Doyle, and Gallo

     Date Introduced: March 13, 2013

     Referred To: Senate Health & Human Services

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. section

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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. section 1396 et seq., of the Social Security

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

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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. Said inflation index

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

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     (b) Stability and predictability of acuity adjustment. - In order to assure that nursing

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facility reimbursement is directly and predictably tied to fluctuations in resident acuity levels, the

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acuity adjustment described in section (a)(2)(i) above shall be applied using a fixed standard, that

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is applied uniformly, from month to month, without being subject to variation for purposes of

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spending levels or budget neutrality.

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

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

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payment rates, the department shall implement a transition plan to moderate the impact of the rate

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reform on individual nursing facilities. Said transition shall 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. The adjustment to the per diem loss or gain may be phased out by

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twenty-five percent (25%) each year; 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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     SECTION 2. This act shall take effect upon passage.

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LC02091

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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 fixed standard be used to nursing facilities for Medicaid

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reimbursement.

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     This act would take effect upon passage.

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LC02091

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