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Ohio State Budget: 2013

This bulletin summarizes key provisions of House Bill (HB) 59, the state budget bill for the Fiscal Year (FY) 2014-2015 biennium, that affect OHCA members. A separate bulletin covers provisions of interest to OCID members. Should you have questions, please contact Pete Van Runkle, 614-436-4154.

Governor John Kasich vetoed one very important provision in HB 59 as passed by the House of Representatives and the Senate: funding of the quality bonus for SNFs at a level of $30 million per year ($9.3 million net state funds). OHCA is very disappointed at the Governor's action and will continue to pursue this worthy goal in whatever manner offers the best opportunity for success.

Other items in HB 59 that were not vetoed and will become law are outlined below. Except for items tied directly to an appropriation, provisions of the budget bill take effect on or about September 29, 2013, or 90 days after the bill was signed by the Governor.

July 1, 2013, SNF Rates

HB 59 has no impact on rates for July 1, 2013. The only rate changes are for case mix and quality points (depending on the number of points each center receives). Both of these changes will be implemented under existing law.

Calendar year 2012 cost reports will be used to determine which centers qualify for critical access facility (CAF) designation and the associated rate increase for FY 2014, again per current law. House Bill 59, however, adds that CAFs must meet at least 5 quality points, of which one must be a clinical point.

Rate Changes Later in FY 2014

Skilled nursing facilities in Stark and Mahoning Counties will receive Peer Group 2 prices starting October 1, 2013. Peer group prices will not be recalculated to reflect movement of the two counties from one peer group to the other until prices are rebased (most likely, for July 1, 2016 rates).

Effective January 1, 2014, custom wheelchairs, patient transportation, and oxygen will be "unbundled" from the SNF rate. SNFs no longer will be responsible for paying for these services for Medicaid patients. The providers will bill Medicaid for them directly, as was the case before bundling was implemented in 2009. Also as of January 1, 2014, the direct care price will be reduced $1.02 per case mix unit for all peer groups to reflect unbundling of the three services.

Rates for bed hold days will be adjusted using occupancy rates from the 2012 cost reports, retroactive to January 1, 2013. HB 59 provides that going forward, the adjustment will take effect at the beginning of each fiscal year instead of each calendar year.

Franchise Permit Fee (Bed Tax)

In a technical change to the methodology for calculating the bed tax, the average rate will be set using the 6% of net patient revenue standard instead of a statutorily specified dollar amount that approximates the 6% test. The differential in tax rate between beds 1-200 and 201 and above in a facility still will exist, as will the current exemptions from the tax.

Quality Points Changes for FY 2015

House Bill 59 makes changes to the quality points that will apply for FY 2015 (July 1, 2014, rates). Achievement of the FY 2015 quality points will be based on results from calendar year 2013.

• The bill does not alter the number of points (5) needed to qualify for the base $16.44 payment, but the standards for 11 of the points will change, in most cases to be more stringent.
• Two of the existing quality measures (accessible bathrooms and patient room personalization) will be eliminated and will be replaced by measures relating to pneumonia and influenza vaccine and PASRR compliance.
• A facility will be required to attain at least one clinical point or its maximum number of points will be limited to 4 ($13.16 payment).

After FY 2015, the points for advance directives and overhead paging will be eliminated (see regulatory provisions). The Department of Medicaid is to recommend replacements to the legislature by July 1, 2014.

"Post Acute" Program

The budget bill includes language directing the Department of Medicaid to seek a federal waiver creating incentives to care for patients in SNFs who otherwise would be placed in long-term acute care hospitals or inpatient rehabilitation facilities. The language specifies that this program will pay SNFs different rates for these patients.

Three Month Cost Reports

The requirement to file a three month cost report after a CHOP is eliminated.

Claims Reviews

The bill separates the Department of Medicaid's review of paid claims for accuracy and recovery of incorrect payments from the cost report audit process.

Part B Crossovers

The budget includes language extending the "Medicaid maximum payment" concept to Medicare Part B crossovers for various services, not including physician services. The maximum payment limits Medicaid reimbursement of coinsurance by the Medicaid fee schedule for the service.

Veterans

The bill contains somewhat vague language about the Departments of Medicaid and Veterans Affairs collaborating to coordinate services for veterans. From previous discussions with the administration, at least one example of coordination is to expand the number of veterans in SNFs covered under a Veterans Administration contract.

Regulatory Provisions

House Bill 59 contains several provisions that increase regulation on SNFs in certain circumstances.

The Department of Health is authorized to consult with the Departments of Medicaid and Aging and the State Long-Term Care Ombudsman when reviewing plans of correction for deficiencies at G level and above. The bill also adds more detail to the requirements for plans of correction, elaborating somewhat on existing federal guidelines.

Each SNF will be required to undertake a quality improvement project every two years. The project must come from a list compiled by the Department of Aging.

Beginning July 1, 2015, all SNFs will have to meet requirements for discussing advance directives with patients and eliminating overhead paging except in emergencies.

Special focus facilities will have their Medicaid provider agreements terminated automatically, with no appeal, if they do not show improvement within 12 months or graduate from the special focus list in 24 months. On any given day, there are a total of 9 special focus facilities in Ohio.

The Board of Examiners of Nursing Home Administrators is renamed the Board of Executives of Long-Term Services and Supports and moved from the Health Department to the Department of Aging. Its composition and duties also are revised to focus more broadly on the continuum of long-term services and supports.

The Technical Assistance Program for SNFs also is relocated from the Health Department to the Department of Aging and renamed the Nursing Home Quality Initiative. Its duties include developing the list of quality improvement projects and assisting SNFs on the verge of termination under the special focus facility provision.

Direct Care Workers

The bill provides for development of a new program for certifying direct care workers (DCWs). The program will be directed primarily at home care workers. A stakeholder workgroup will design the contours of the program and report to the General Assembly by December 31, 2013. The legislature then will consider authorizing legislation, which will include the Health Department adopting standards by October 1, 2014, and the Department of Medicaid denying payment for uncertified DCWs starting October 1, 2015.

Distinct Parts in SNFs

The budget legislation authorizes certain SNFs to create distinct parts. To qualify, a center must be located in a "bed donor" county under the certificate of need program and must have received its license and certification after January 1, 2008. The latter requirement applies to the entire facility, not to additions.

House Bill 59 also allows a SNF to deny admission to a Medicaid patient if the center has more than 25% Medicaid census (currently, 80%).

Both of the above provisions sunset December 31, 2014, but a stakeholder workgroup is to recommend additional legislation on the subject by December 31, 2013.

PASRR

Thirty day hospital exemptions no longer will be permitted for individuals admitted to a SNF from a psychiatric hospital or unit. These admissions must go through the regular PAS process. This change will take effect on or about September 29, 2013.

Resident Funds

The state budget has two provisions affecting patient/resident funds:

• The personal needs allowance for SNF patients increases to $45 per month in calendar year 2014 and $50 in calendar year 2015. This change does not apply to ICFs/IID.
• The requirement for placing resident funds into an interest bearing account is raised from $100 to $1,000. This change affects only residential care facilities (RCFs) and non-certified SNFs, because the certification standards set the level at $50.

Assisted Living Waiver

The state budget provides for a 3% increase in Assisted Living Waiver rates (there is no actual language in the bill on this increase, but the administration has stated its intent to provide it).

In addition, the bill eliminates background check requirements for the ALW that exceed the standards under the RCF licensure law.

PASSPORT

House Bill 59 grants a 1.5% increase in PASSPORT provider rates generally, with adult day services providers receiving a 20% increase. There also is a 5% increase in funding for PASSPORT Administrative Agencies.

Home Health Shared Savings

The budget includes a provision authorizing the Department of Medicaid to create a program under which home health agencies can share in Medicaid savings from preventing avoidable admissions to a hospital or SNF.