Nursing Facility Enhanced Payments

1. Nursing Facility Enhanced Payments Shelli Silver Assistant Director February 20, 2013 Our first care is your health care Arizona Health Care Cost Containment System

2. Federal & State Regulatory Requirements • Laws 2012, Second Regular Session, Chapter 213 prescribes that AHCCCS make supplement payments to NF providers • AHCCCS is generally prohibited by Federal law from making supplemental payments to providers • As such, monies have to be paid to MCOsfor the MCOs to make the supplemental payments • CMS does not support supplemental payments by MCOs • CMS has “grandfathered” rural hospital payments until such time that they have a CMS policy stating otherwise Our first care is your health care Arizona Health Care Cost Containment System

3. Federal & State Regulatory Requirements, cont. • AHCCCS submitted a methodology to CMS for MCO payments for NF supplemental payments which CMS denied • Proposal uses the MCOs as payment administrators – not permitted • Payments to MCOs must be rolled into the per member, per month (pmpm) cap rate; specifically to the appropriate component of the cap rate, e.g. NF • Cap rate adjustment has to be made at the same geographic level as the cap rates, rather than the statewide adjustment AHCCCS planned  (original proposal set a fixed rate so as to not fluctuate with changes in membership) • AHCCCS cannot mandate that MCOs pay unique providers specific amounts, nor can AHCCCS mandate payment terms for a specific group of providers or payments, including timing of such payments, or proof of such payments, unless those mandates apply to all payment terms in the MCO contract  Our first care is your health care Arizona Health Care Cost Containment System

4. Federal & State Regulatory Requirements, cont. • AHCCCS is mandated to use revenues generated by the assessment, and matched by federal funds, for NF payments • State General Fund money cannot be used; AHCCCS funds cannot be used • Thus NF supplemental payments cannot exceed amount of funding available in NF Assessment Fund • Supplemental payments are to be based on NFs’ proportion of AHCCCS bed days from the most recent prior year • Supplemental payments are currently authorized through CYE 15 Our first care is your health care Arizona Health Care Cost Containment System

5. Approvable Proposal • CMS will approve a cap rate adjustment to the NF component of the rate, by GSA, by MCO • Because each quarterly assessment fund balance will only provide sufficient funding for one quarter of cap rate adjustments, AHCCCS cannot make prospective cap rate changes • Consequently CMS requires that contract amendments for retroactive quarterly cap rate adjustments occur each quarter • Thus even though the retroactive cap rate will be identical for each quarter, AHCCCS is required to seek CMS approval with new amendments each quarter through CYE 15 Our first care is your health care Arizona Health Care Cost Containment System

6. Approvable Proposal, cont. • Because cap rates paid to MCOs must be prior-approved by CMS, AHCCCS must estimate the MCO payments • Because AHCCCS cannot make payments exceeding the quarterly fund balance, that estimate must be conservative • Thus AHCCCS established the cap rates at 80% of the expected annual fund balance (based on annual assessment projection) • After the completion of the year, when the annual fund balance is known, AHCCCS will make reconciliation payments to MCOs with zero risk Our first care is your health care Arizona Health Care Cost Containment System

7. MCO Enhanced Payments • AHCCCS will comply with Federal regulation and will not mandate payment amounts or timelines • MCOs must comply with State regulations – law and rule – regarding payments to nursing facilities • Laws 2012, Second Regular Session, Chapter 213 • R9-28-703 Our first care is your health care Arizona Health Care Cost Containment System

8. Questions? Our first care is your health care Arizona Health Care Cost Containment System