Good news: The budgets issued earlier this week by the House of Delegates and Senate budget-writing committees fund VHCA-VCAL’s priorities related to:

• Medicaid inflation,
• the Value-Based Purchasing (VBP) Program,
• Medicaid reforms related to capital cost reimbursement, and
• increases in the Auxiliary Grant rate.

Both the House and Senate are funding the inflation increase for Medicaid nursing facility rates. While the state has been able to fund the rate increases in recent years, we do not take this for granted as a downturn in state finances could put this at risk.

• The actual inflation adjustment will be issued closer to the start of the state fiscal year when DMAS calculates the new rates.
• Remember that nursing facilities need to complete the wage survey by February 17, as this is a critical component of the rate.

In addition, the House and Senate have also provided more funds for the VPB Program.

• The House has included $62.3 million while the Senate is proposing to add $30.4 million.
• While they will have to reach a compromise on the final amount, any increase will be added to the funding already allocated to the VBP Program for SFY 2024, which is currently $143 million.

Medicaid reform funding: The Senate has also provided about another $10 million in funding for three other items related to capital cost reimbursement for which VHCA-VCAL was advocating:

• elimination of the minimum occupancy requirement;
• establishment of a private room differential; and
• setting an artificial cap on a facility’s calculated average age at 21 years (this would remain in place for seven years) in order to encourage renovation by recognizing the costs in the reimbursement rates.

Assisted Living and Auxiliary Grant: Both bodies would increase the Auxiliary Grant (and any Medicaid impact), but at different amounts, as well as increase the Personal Needs Allowance for assisted living residents to $115.

• The House is proposing an AG increase to $1,832 versus $2,500 offered by the Senate. We would of course prefer to see the final budget come close to the Senate amount.

Other budget items of note: VHCA-VCAL will also be contacting conferees to express support for inclusion of these items in the final budget:

• Inflation (not rebasing) of the Specialized Care Rates: This is included in the Senate budget.
• VBP Program inflation – This language is in the Senate budget only; technically this does not need to occur until next year’s budget, but this is important as a signal of the state’s commitment to keep VBP funding consistent with increased costs.

• The House included language providing DMAS temporary flexibility to deal with any changes necessary due to CMS’s cessation of support for RUGs-based systems; the language also directs the development of a long term plan, with stakeholder input, to address this issue.

Next steps: It’s important to remember that the committee budgets are one step in the state budget process. The House and Senate will reject the other’s budget in the coming days and appoint conferees to work out the differences. 

• We will be asking the budget conferees to support the House-proposed funding level for the VBP program and the Senate approach to the additional rate reforms.