Medicaid reimbursement for hospice services provided in a nursing facility (NF) will change effective July 1, 2019. Legislation passed by the General Assembly will result in important changes related to the room and board reimbursement and the passthrough of the RUG rate.

Currently when a resident elects hospice, the NF will cease billing Medicaid for the resident’s care and the hospice will begin billing for its services to the resident. This includes reimbursement for “room and board” at the NF. The hospice gets reimbursed at 95 percent of the RUG rate, which is determined by the NF. The NF, via separate contract with the hospice, then gets reimbursed by the hospice at whatever rate it has negotiated with the hospice. In many cases, the rate negotiated by the NF reflects the RUG rate, often at the full amount (not the 95 percent received by the hospice), although these contracts vary by NF.

First, the General Assembly has increased the amount for “room and board” that a hospice will receive to 100 percent of the RUG rate. Depending on the NF’s negotiated payment rate from the hospice, you may want to consider this increase relative to your arrangement with the hospice.

Second, the legislation directs the Department of Medical Assistance Services (DMAS) to modify the arrangement whereby the hospice gets paid the RUG rate and passes that through to direct payment of the full RUG rate to the NF. However, because of federal regulations, this will only be allowed in the managed care program (primarily CCC Plus). The fee-for-service (FFS) program will remain as it is currently with the hospice receiving the “room and board” (albeit at 100 percent beginning July 1, 2019) and passing through payment to the NF. 

The six managed care organizations (MCOs) will be directed to pay the NF directly, at the full billed RUG rate (unless you have negotiated a different payment arrangement with the MCO) as if the resident had not elected hospice care while the FFS process will remain as it is today. It is unfortunate that the same procedures will not apply to both FFS and managed care, but reimbursement being set at 100 percent of the RUG in either situation is a very positive outcome for NFs.

We have submitted a few questions to DMAS to verify whether there will be any procedural or technical changes to the NF billing in CCC Plus once the resident elects hospice. We see no need for changes but want DMAS to verify this and direct the MCOs as appropriate. DMAS has indicated that guidelines for the new approach are forthcoming. VHCA-VCAL will relay those to members once we receive them. 

On the FFS side, while the volume is significantly diminished due to the mandatory nature of CCC Plus, there will still be the occasional FFS hospice recipient residing in the NF, so you will likely need to maintain an arrangement with the hospice(s) for that situation. 

If you have any questions or concerns, please communicate them to Steve Ford as soon as possible so they can be clarified with the aforementioned guidelines under development by DMAS.