Budget packages released by the House of Delegates and Virginia Senate on February 3 include positive news for long term care providers.  While there are differences between the House and Senate proposals to be negotiated, both budget committees of the General Assembly have continued to fully fund the Medicaid forecast. The forecast included the regulation-driven inflationary adjustment for nursing center services, estimated at 3.0 percent for fiscal year 2020. 

As always, this positive outcome is not final until passage of a budget by the full General Assembly and acceptance by the governor, but the inflation update continues to be in the best posture possible at this point in the process. 

We are grateful that the Senate Finance Committee and the House Appropriations Committee demonstrated their support for funding for nursing centers in their budgets. This action reflects legislators’ understanding of the important care you provide to your residents and the impact Medicaid rates have on your ability to provide that care.

Additional budget measures of interest to long term care providers include:

Reimbursement for Hospice Care

Language in both budgets will modify how nursing facilities are reimbursed when a resident elects hospice care.  Currently, when an individual elects hospice care, the hospice receives the facility payment, albeit at 95 percent of the RUG rate. The hospice then reimburses the nursing facility according to a separate contract (usually at the full RUG rate). Under the language adopted in both versions of the budget, 100 percent of the rate will be paid, and to the extent the Centers for Medicare and Medicaid Services (CMS) approves, the full rate will be paid directly to the nursing facility from Medicaid. 

It is likely this will only be allowed under CCC Plus due to the flexibility CMS provides in certain waivers (CCC Plus is executed under Medicaid waivers, not the State Plan). If that is approved, the CCC Plus MCO would simply continue to pay the nursing facility RUGs regardless of the hospice election. Because it is unlikely CMS will approve this for the State Plan (fee-for-service), nursing facilities will still need to maintain their contracts with hospices, although volume should be much diminished with the full implementation of CCC Plus.

Capital Cost Reimbursement

Finally, both versions of the budget include some clarifying language around Medicaid capital cost reimbursement associated with new facilities or renovations that qualify for mid-year rate adjustments. Specifically, the language deals with the need for occupancy assumptions, annualizing certain taxes and insurance and the estimation of cost generally. VHCA-VCAL reviewed this language prior to its introduction and expects to be involved in the detail as it moves to implementation.

Next Steps

Speaker of the House of Delegates Kirk Cox (R-Colonial Heights) has named the House budget conferees:

• House Appropriations Committee Chairman S. Chris Jones (R-Suffolk)
• Steve Landes (R-Augusta)
• Chris Peace (R-Hanover)
• Barry Knight (R-Virginia Beach)
• Scott Garrett (R-Lynchburg)
• Luke Torian (D-Prince William)
• Mark Sickles (D-Arlington)

The House conferees will negotiate with the Senate on the final budget conference reports. The Senate has yet to announce the names of its budget negotiators.