BEFORE THE DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 37.40.307 and 37.40.361, and the repeal of ARM 37.40.309 pertaining to nursing facility reimbursement rates for state fiscal year 2019

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NOTICE OF AMENDMENT AND REPEAL

 

TO: All Concerned Persons

 

1. On May 25, 2018, the Department of Public Health and Human Services published MAR Notice No. 37-845 pertaining to the public hearing on the proposed amendment and repeal of the above-stated rules at page 1016 of the 2018 Montana Administrative Register, Issue Number 10.

 

2. The department has amended and repealed the above-stated rules as proposed.

 

3. The department has thoroughly considered the comments and testimony received from individuals representing associations, organizations, and nursing facilities. Many commenters made the same comments. A summary of the comments received and the department's responses are as follows:

 

COMMENT #1: Several commenters stated that the proposed nursing home Medicaid reimbursement rates for State Fiscal Year (SFY) 2019 do not cover the cost of providing care to the residents.

 

RESPONSE #1: The department considered the impact of the rate changes on efficiency, economy, quality of care, and access to Medicaid services and concluded that the rates are sufficient to meet the requirements of 42 USC 1396(a)(30)(A).

 

COMMENT #2: Several commenters stated that there are additional costs associated with high acuity Medicaid residents that the proposed rates do not address.

 

RESPONSE #2: The current reimbursement methodology adjusts a facility's rate based on the level of care the facility's residents require. If a facility's residents require a higher level of care, the rate is adjusted. This is referred to as the "acuity adjustment." The acuity adjustment is based on the facility's Medicaid average case mix index and the statewide average Medicaid case mix index.

 

Each nursing facility receives the same operating per diem rate, which is 80 percent of the statewide rate.  The remaining 20 percent is the direct resident care component of the rate and is acuity-adjusted.  Each facility's direct resident care component rate is specific to that facility and is based on the acuity of Medicaid residents served in that facility. As acuity changes in each facility, based on the level of complexity of the residents being served relative to the state-wide acuity, facility rates adjust upward or downward to account for this change in acuity. The statewide average acuity has gone from 1.0072 in 2016, to 1.0114 in 2017, to 1.0185 in 2018, and is currently at 1.0354.  The current methodology adjusts 20 percent of the total rate for acuity, which was a desired characteristic when the price based reimbursement system was first adopted to mitigate wide fluctuations in rates when acuity changes occurred in facilities.

 

COMMENT #3: The department received several comments that the department is not correctly applying the language of House Bill 618 (2017) (HB 618).

 

RESPONSE #3: The proposed rate represents an 8.2 percent increase over the rates established on January 1, 2018. This rate increase complies with the combined requirements of House Bill 2 (2017) (HB 2), Senate Bill 261 (2017) (SB 261), and HB 618.

 

COMMENT #4: In the 2017 special legislative session, Senate Bill 9 (SB 9) was adopted.  If revenue benchmarks are achieved on August 15, 2018, SB 9 provides additional appropriations for state government.

 

RESPONSE #4: The proposed rule amendments reflect Montana Code Annotated and legislatively authorized appropriations currently in effect. The impact of potential future actions is not considered in this rule.

 

COMMENT #5:  The statewide rate is not in the proposed rule.  The proposed rule did not address the rate cuts or the amount of the decrease.  Is the decrease 3 percent, 4.5 percent, or 1.5 percent?

 

RESPONSE #5: The proposed nursing home rates are not a decrease. The proposed rate represents an 8.2 percent increase over the rates established on January 1, 2018. This rate increase complies with the combined requirements of HB 2, SB 261, and HB 618.

 

COMMENT #6: The department received a comment to leave the current state fiscal year in the direct care wages rule, ARM 37.40.361.  The language in the direct care wages rule should be more specific in using the word "increases."  Use the word "increases" and/or "maintains."

 

RESPONSE #6: The Medicaid adjustment for nursing facility direct care wages is calculated annually. Previously, the department changed the state fiscal year referenced in the rule annually. The department proposes replacing the reference to the specific state fiscal year to that of a general fiscal year reference so this amendment will be unnecessary in the future.

 

The word "increased" is removed, because funding increases for direct care wages do not occur every state fiscal year.

 

COMMENT #7: The department received a comment in support of the repeal of ARM 37.40.309.

 

RESPONSE #7: The department thanks the commenter and concurs with the comment.

 

COMMENT #8: The department received several comments that the notice for this proposed rulemaking was inadequate.

 

RESPONSE #8: The notice meets the requirement of the Montana Administrative Procedure Act. The notice provided the public with notice of the proposed substantive rule changes including the change in rates.

 

COMMENT #9: A commenter stated that it appears that the department proposes to pay nursing facilities about $9 million less for SFY 2019 than what was required and appropriated in HB 618.

 

RESPONSE #9: The proposed rate represents an 8.2 percent increase over the rates established on January 1, 2018. This rate increase complies with the combined requirements of HB 2, SB 261, and HB 618.

 

COMMENT #10: A commenter stated that SB 261, section 12, included a reduction of 0.5 percent and this reduction is 2.99 percent.

 

RESPONSE #10: The proposed rate represents an 8.2 percent increase over the rates established on January 1, 2018. This rate increase complies with the combined requirements of HB 2, SB 261, and HB 618.

 

COMMENT #11: Several commenters stated that the department implied to the Legislature that the 2.99 percent decrease in rates would only apply for six months (to the end of SFY 2018).  Why isn't the department adjusting the proposed rates to remove the decrease?

 

RESPONSE #11: The proposed rate represents an 8.2 percent increase over the rates established on January 1, 2018. This rate increase complies with the combined requirements of HB 2, SB 261, and HB 618.

 

COMMENT #12: Commenters asked why the department does not publish proposed rate schedules when it publishes proposed rule changes impacting rates.

 

RESPONSE #12: The department adopts rates through rulemaking, and nursing home rates are readily available to the public and to the industry.

 

COMMENT #13: Commenters stated that the proposed rates would not cover the cost of care of facilities with high percentages of Medicaid residents, would shift the cost of care to private pay residents, and may lead to facility deterioration or closure.

 

RESPONSE #13: The rulemaking proposes an increase in rates which the department believes will lessen the possibility of these effects.

 

COMMENT #14: Commenters stated Montana rates are lower than those in Idaho and North Dakota.

 

RESPONSE #14: The rate increases the department proposes are not required to reflect the circumstances in Idaho or North Dakota.

 

            4. These rule amendments and rule repeal are retroactively applied to July 1, 2018.

 

 

/s/ Geralyn Driscoll                                      /s/ Marie Matthews                                       __

Geralyn Driscoll                                           Marie Matthews for Sheila Hogan, Director

Rule Reviewer                                             Public Health and Human Services

 

 

Certified to the Secretary of State July 10, 2018.