Proposal Presented for the Master Plan for Aging (#12)
Disclaimer
Throughout the MPA process, more than 100 proposals were developed thanks in particular to thousands of hours of work by external stakeholders and members of the public. These proposals and the MPA Council commentary are being submitted to the Governor and shared with policymakers and the public to inform policymaking. These proposals represent a starting point for discussion. Further discussion is necessary between relevant state agencies and stakeholders to both refine these proposals and assess which may be appropriate to adopt and implement.
Summary
Modify and reactivate the Voluntary Residential Health Care Facility Rightsizing Demonstration Program to incentivize facilities to voluntarily give up unneeded beds and ensure appropriate placement through further expansion of alternate levels of service and save Medicaid funds. Proposed modifications would include loosening regulations around reactivation, providing a financial incentive for decertification, and expanding the program.
Justification
Statewide nursing home occupancy has been trending at less than 90% as a result of staffing shortages and availability of alternate care settings, among other factors. Due to the current Medicaid pricing system, facility operators are incentivized to operate a larger number of beds and maintain high occupancy rates. Facilities are reluctant to decertify beds and relinquish the associated economic value. Voluntary rightsizing would incentivize facilities to give up unneeded beds, ensure appropriate placement through further expansion of alternate levels of services and save Medicaid dollars.
Full Proposal
Modify and reactivate the Voluntary Residential Health Care Facility Rightsizing Demonstration Program to incentivize facilities to voluntarily give up unneeded beds and ensure appropriate placement through further expansion of alternate levels of service and save Medicaid funds. Modification features to the previous Demonstration Program should include:
- Allowing operators to reactivate temporarily decertified beds at any time after the first year of decertification with prior notice and determination of the facility's peer group assignment for Medicaid reimbursement based on the facility's total certified beds prior to any reductions.
- Subject to the Certificate of Need process, the Demonstration Program would allow operators to permanently convert generic nursing home beds to specialty service beds, allow operators to permanently decertify beds and receive a one-time payment from the state for doing so, and allow operators to convert existing semi-private rooms to private rooms and receive a supplemental payment from Medicaid for doing so.
- Increase the 5,000-bed limit.
- The State would reactivate the program through an open solicitation or periodic time-limited solicitations.
MPA Council Commentary
This proposal is categorized as near-term. Before implementing this proposal, the State would have to consider metrics for evaluating implementation success — for example, rates of decertified and converted nursing home beds, remaining availability of and occupancy rates of nursing home beds, and cost savings to the State). Decisions about the provision of Medicaid services happen in the context of the Medicaid Global Spending Cap, and any funding implications of this proposal would be subject to the annual budget process and the availability of resources.