Health Law Daily States encouraged to utilize funding for nursing facilities with COVID-19 residents
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Tuesday, August 25, 2020

States encouraged to utilize funding for nursing facilities with COVID-19 residents

By Rebecca Mayo, J.D.

CMS provided guidance to encourage states to utilize flexibilities available to support the nursing facilities’ ability to safely care for residents, including COVID-19 positive residents, during the public health emergency.

To assist providers of America’s health care system handle the COVID-19 public health emergency, the federal government established relief funds and CMS created a Medicaid Disaster Relief State Plan Amendment Template. CMS and Children’s Health Insurance Program (CHIP) released an informational bulletin that identifies flexibilities available to state Medicaid agencies to enhance payment for nursing facilities through the COVID-19 public health emergency. The bulletin also highlights specific actions that certain states have already taken to support facilities. Through the bulletin, CMS encourages states to utilize the available flexibilities to improve care for Medicaid beneficiaries residing in nursing facilities (CMCS Informational Bulletin, August 24, 2020).

Payment enhancement. States can modify state plan payment rates and methodologies for nursing facilities to increase payments to recognize additional costs incurred in delivering Medicaid services. These additional costs may include additional labor costs and supply costs such as costs for personal protective equipment. States can also target payment increases to nursing facilities that are treating residents diagnosed with COVID-19, or to nursing facilities in geographic areas that are experiencing an outbreak. These payment enhancements can be a per diem dollar increase or percentage increase to existing base rates, a new payment methodology, a temporary modification to an existing rate setting methodology, a new targeted supplemental payment, or a modification to state bed hold policies.

Managed care. States that have a managed care delivery system can direct specific payments made by managed care plans to providers though a state-directed payment. States can also consider paying for services outside of the managed care capitation rates as a non-risk payment arrangement structured as either a separate non-risk contract with the managed care plans or as an amendment to existing managed care plan contracts to include a non-risk payment.

Examples. Ohio has provided tiered payments, based on an individual resident’s level of COVID-19 quarantine or isolation, to nursing facility health care isolation, centers (HCIC) for COVID-19. Ohio implemented a non-risk payment arrangement for these payments. Michigan implemented increased payment rates for nursing facilities that are designated by the state as a "COVID-19 Regional Hub." The facilities received an initial per bed payment in the first month to address staffing needs and infrastructure changes required to provide the necessary care, and a supplemental payment per resident per day built into the per diem rates after the first month. Iowa will provide COVID-19 Relief Rate (CRR) payments to nursing facilities that either have a designated isolation unit for COVID-19 treatment or have been designated in their entirety for COVID-19 treatment. These payments are an add-on payment per resident per day to the facility.

MainStory: TopStory CMSLetters CMSNews Covid19 GCNNews IRFNews LTCHNews ManagedCareNews MedicaidNews MedicaidPaymentNews SNFNews

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