This morning, the Division of Medicaid Services (DMS) hosted its Public Provider Meeting for Nursing Home Rates. This meeting is held yearly to update providers on new rate information, uses of available funding and any other changes to the Methods of Implementation for Wisconsin Nursing Home Payment Rates.

A copy of the meeting agenda can be found here. A recording of the meeting as well as the slides used will be posted soon here. Nursing Home Rate Setting Section Manager Nate Staley opened the meeting by introducing the Division’s newest rate analyst, Madeline McIlhon. Next, he shared the new rates for the rate year beginning July 1, 2024.

The Direct Care Nursing base and Support Services price are set at a standard of the median of their reported costs + 25%.

• Direct Care Nursing increases from SFY24 $141.22 to SFY 25 $152.00, or by 6%
• Support Services increases from SFY24 $157.73 to SFY25 $171.26, or by 6%
• Continuing policy of no Direct Care Other update
• Fiscal impact of both increases is $24.6m

Within the Property cost center, DMS will be continuing the current policy due to not having an appraisal vendor contract.

• Inflating URC (undepreciated replacement cost) and DRC (depreciated replacement cost), and the per bed max by 14%.
• Used property tax data from DOR to calculate the 14%.
• Per bed max will be $110,278 resulting in a $7.2 million increase

Additionally, other rates have been increased as follows:

• Increase Ventilation Unit daily rate by 2.5% (inflated by Direct Care wages inflation factor, per the State Plan)
  • New Vent rate is $949.15.
  • Fiscal impact of $355,445
• Increase Traumatic Brain Injury (TBI) daily rate by 2.5% (inflated by Direct Care wages inflation factor, per the State Plan)
  • New TBI rate is $1,007.00.
  • Fiscal impact of $112,425
• Increase Specialized Psychiatric Rehabilitative Services (SPRS) by 2.5% from $24.26 per day to $24.87.
• The Supplemental Payment program for county nursing homes has been eliminated and converted to a prospective per-diem add-on for SF.

The only change to the Methods this year is a new requirement for an independent financial audit that will also include newly required supplemental schedules. Beginning this year, all Medicaid nursing home providers will be required to submit an independent financial audit, performed by a CPA, to be used for SFY26 rate setting. These audits will be due 5 months after a facility’s fiscal yearend, with extensions available for good cause. When asked if there is a specific list of qualifications for this extension, DMS personnel responded no, not at this time and it would likely be a case-by-case basis.

Medicaid also indicated that they will reimburse homes for the Medicaid portion of the audits – there is no formula for this yet, more information will be forthcoming. Additionally, it was shared that this reimbursement will be issued as a separate payment.

Other requirements are as follows:

• The audit’s income statement must separate the nursing home line of business from all other operations.
• DHS will accept consolidated financials for NHs with common or identical ownership as long as the income statement has a separate column for each licensed facility and separate supplementary information completed for each facility.
• Independent CPA will provide NH by NH supplementary information for direct care salaries, depreciation, property tax, and loans and leases, which directly impact MA rates.
• Supplemental information will be provided to DHS on forms created by DHS.
• Independent audits are for financial statements not Medicaid cost reports.

DMS stated that this process will allow final rates to be set faster, as DHS auditors will perform their full review of cost reports for only about 1/3 of facilities each year. The purpose of the independent financial audit is to provide DHS with reasonable assurance that the financial statements, internal controls and reporting from the owner/operator of each NH are accurate and have been prepared in line with accepted regulatory standards when DHS is not reviewing a provider’s cost report.

Many questions were asked by participants on the call regarding specifics to many points in the presentation. At this point, this information is all that is available, and they will be sharing more details once available. There is an audit workgroup that will be meeting again on July 30, they expect more details to be ready after that meeting.

Staley stated that interim rates have been calculated for SFY25. MCOs will be directed to use these rates for DOS 7/1/24 onward. The interim rates have to be entered manually and therefore will be posted to ForwardHealth within a few weeks. As a reminder, these interim rates are calculated directly from cost reports and so final rates will likely be lower after audits and adjustments are made.

Finally, completeness checks have been performed for all submitted cost reports and desk reviews are now underway. When a rate program is finalized, DHS will begin notifying providers of their initial rates.

Please contact Kate Dickson with any questions.