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Virginia Health Care Association | Virginia Center for Assisted Living

Update on Medicaid Day Rate Enhancement and Budget Developments

Update on Medicaid Day Rate Enhancement and Budget Developments

In the last week there have been two developments related to nursing facility Medicaid funding. First, on April 10, Gov. Ralph Northam approved a $20 per day add-on to Medicaid nursing facility rates for dates of service from March 12 through at least June 30. The add-on will continue until the point the emergency declaration is lifted.

Second, earlier this week, the governor announced his action on the budget passed by the General Assembly in March. With declining state revenue projections, Gov. Northam chose to delay nearly all “new” state spending until a new revenue assessment can be made showing the resources available for these new spending items. This includes the nursing facility rebasing funding.

$20 Per Day Rate Enhancement 

On a quarterly basis, the increase is projected to provide approximately $30 million in additional funds to nursing facilities across the Commonwealth. The full value of the increase will depend on how long the enhancement stays in place and the number of days actually billed for that period of time.

We are communicating with DMAS on how to operationalize the $20 enhancement. We have proposed that facilities/companies submit a “roster billing” invoice to each CCC Plus plan/fee-for-service after the close of each month (for the March 12-31 period, as soon as possible) that would generate a lump sum payment outside of the normal claims processing. Discussions with DMAS and the plans will continue this week. We will provide updates on the procedure that will be adopted. DMAS has indicated its goals are uniformity in the process and quick turnaround so that nursing facilities get the payments without undue delay. 

Nursing Facility Rebasing

In preparing his budget amendments, Gov. Northam prepared a single line item compiling all new Medicaid spending (with one exception) in the 2021/2022 budget bill passed by the General Assembly and “unallots” the spending items. The nursing facility rebasing item is part of this larger list. What that means is that the language providing the rebasing fix and the appropriation to fund it remain in the budget, but DMAS is not authorized to implement the language nor the appropriation without further action by the governor and General Assembly until the state has updated revenue figures.

During the session, VHCA-VCAL was successful in restoring $13.6 million to the 2021 rates, with comparable amounts for 2022 and 2023. The overall effect was a year-to-year increase just under 2 percent from 2020 to 2021. The governor’s action delays (and possibly eliminates) this increase, thereby reducing the year-to-year impact back to 0.7 percent starting July 1.

When legislators return for the one-day reconvened session on April 22, the General Assembly can only vote up or down on the governor’s recommendations. They cannot amend them. Thus, the only way the rebasing fix could be immediately restored would be if the General Assembly voted down the entire item (over $207 million savings in state funds). This is highly unlikely.

In summary, the rebasing fix will not be in place on July 1, meaning the rates associated with the unadjusted rebasing will be implemented then. (We would anticipate the $20 per day add-on would still be in effect then and for a period not yet specified thereafter). VHCA-VCAL is already working to advocate that the rebasing fix be reinstated as soon as possible. The earliest this could happen is a possible special session in the late summer or early fall.