Last week KDADS sent out the July 1, 2017 Medicaid Rates. Unfortunately, these rates do not represent a complete restoration of the 4.47% cuts from last year. Many providers were confused to see a 3.65% cut reflected on their new rate. In order to understand this we need to look back to what happened last year.
The calculation of the Medicaid reimbursement to nursing homes for 2016-2017 included a rebasing to years 2013-12015. Prior to this, rates were based on years 2009-2012. The rebasing was welcomed, however the 4.47% cut in rates after the rebasing was not. This was done by the Governor to balance the 2016-2017 budget. LeadingAge Kansas and other long-term care provider advocacy groups fought all year to get this cut restored.
The State was required to publish the proposed rates for July 1, 2017 on April 20, 2017. These rates did not reflect the restoration of the 4.47%, however they did change the base years for the rates to 2014-2016. This rebase, with inflation to 12/31/17, would need $660 Million to fully fund. However, KDADS was required to keep this budget neutral, which would make the amount available $609 Million. That is why the proposed rates published 4/20/17 showed a 7.95% cut.
With the restoration of the 4.47% cut extra funds were available, however not enough to fully fund the rebase. The restoration of the 4.47% with base years 2013-2015 generates a fiscal impact of $638 Million. This is all that is available to fund the rates in the Budget. The difference between the $660 Million and $638 Million is 3.65%.
This was a complicated process to follow through. The good news for most providers is that the rebase plus the restoration of the 4.47% led to an increased rate. For some providers, however, the rebasing hurt them, as they had cut costs in 2016 to stay afloat with all of the Medicaid pending issues, higher bed tax, and the 4.47% cut. So the rebasing brought their rate down. If that is your issue, there is a process with KDADS to appeal and ask for consideration. Contact Melissa Warfield at KDADS at 785.296.4986 for more information.
The table below shows the 3 Budget scenarios discussed and their impact.
For more information, contact Lisa Stuever, LeadingAge Kansas Reimbursement Specialist.
Scenario 1
Base years 2013-2015 4.47% cut remains
Fiscal impact for all LTC providers in the state
Fiscal impact for LeadingAge Kansas member homes
Scenario 2
Base years 2013-2015 4.47% cut restored
Fiscal impact for all LTC providers in the state
Fiscal impact for LeadingAge Kansas member homes
Scenario 3
Base years 2014-2016, inflation to 12/31/17
Fiscal impact for all LTC providers in the state
Fiscal impact for LeadingAge Kansas member homes
