ICYMI: DHS Holds Final Method Meeting – Announcing Historic Increases

On September 14th, personnel from the Division of Medicaid Services (DMS) held the final public provider Methods meeting finalizing the rate setting formula for SFY23. David Albino, Deputy Director of the Bureau of Rate Setting led most of the meeting. Handouts are available here and here.

Albino explained that for SFY23, $516,000,000 will be spent for the non-DD SNF T19 program. This total amount account for acuity increases, inflation and Departmental increases to the formula, which is up from a budgeted $409,000,000. He also stated that calculations are still be completed for the PDPM hold harmless and updates will be posted soon. SFY23 will be the final year of any hold harmless payments but DHS has yet to announce the amount provider can expect for this year.

Next, Albino began sharing the formula updates that will occur for SFY23. On average, SNF providers will experience a 23.09% rate increase. The new rates will be retroactive to July 1, 2022. The specifics of the plan are below:

  1. FFS Only (excludes ICFs)
  2. DCN at Median + 25%
    • DCN increases by 40.46% compared to SFY22
    • Target set to $122.68
  3. SS increases by 56% compared to SFY22
    • Target set to $89.65
  4. 5% is pro-rated based on the proportion of the CR year for which the facility did not experience SFY22
  5. Patient days –
    • 07% reduction.
    • DHS required to pay set rates, regardless of PDs.
  6. 02% growth in DCN acuity
  7. 92% growth in DC Other acuity.
  8. Any projected revenue in excess of expenses, on a case-mix neutral basis, reduced from SS.
    • Funds are re-circulated to remaining facilities.
    • Reduction taken from a priced rather than acuity adjusted rate component.
  9. NEMT (aligns with state-wide NEMT contract):
    • From $10 per trip to $43 per trip.
    • From $1 per mile to $1.90 per mile.
  10. SPRS (inflated to mid-point of SFY23):
    • From $9.00 to $23.39.

The Department of Health Services (DHS) intends to meet these assumptions moving forward and will include them in the cost-to-continue so that these increases continue in following years. Their goal is to fund SNFs at the highest cost coverage and Albino stated hopes that providers can feel more confident to spend necessary funds knowing that they will be available on the other end.

This plan includes historic increases in the support services cost center which has long been greatly underfunded and which WHCA/WiCAL and its members have advocated for for years. Throughout the entire this year, WHCA/WiCAL has pushed for a more equitable system for setting rates so that all providers benefit from available funding within the system.

The new vent rate will be $726 and TBI will be set at $947.

Finally, Albino announced that they will changing the cost report due date to March 31, rather than May 31, moving forward. There was push back on this point during the meeting but DMS believes this will held them set rates much earlier than they currently do. This year, their goal is to have all final rates set by the end of November. They did ask providers to respond timely to any documentation requests from auditors to ensure timely rate setting.

We expect that most providers will see increases under this plan but please reach out to Kate Dickson, Vice President of Reimbursement Services once you receive your final rates if they are not what you expected given these new parameters.