Indiana Medicaid
Indiana’s Case Mix reimbursement system is complex and frequently changing. We track and provide guidance on a range of matters from new policies, cost report changes, audits and quality programs. We also engage in policy development and expansion on Medicaid Long Term Services and Supports and Medicaid Waiver and Home and Community Based Services.
Indiana Medicaid
Indiana’s Case Mix reimbursement system is complex and frequently changing. We track and provide guidance on a range of matters from new policies, cost report changes, audits and quality programs. We also engage in policy development and expansion on Medicaid Long Term Services and Supports and Medicaid Waiver and Home and Community Based Services.
Nursing Facility Rates
The Medicaid reimbursement rate methodology for nursing facilities in Indiana is a prospective cost-based rate adjusted quarterly based upon the facility’s case mix index, which is a measure of resident acuity and resource use. The rate is rebased each July 1 and is not finalized until September, October or November of that year.
The rate is comprised of five main components (Direct Care, Indirect Care, Administrative, Capital and Therapy) and several add-ons. The main add-on components are the Profit Incentive, the Quality Assessment Fee add-n, the Total Quality Score add-on, the Special Care Unit add-on (Alzheimer/Dementia Unites) and Ventilator add-on.
Rate adjustments occur on 10/1, 1/1, 4/1, and 7/1. For purposes of the Medicaid rate, all residents are categorized based on the Resource Utilization Group IV 48-grouper (“RUG IV 48 Grouper”), meaning there are 48 categories a resident could be classified into based on a clinical assessment called the Minimum Data Set (“MDS”), required to be performed by a registered nurse.
Each of the five components, except for Therapy and Capital, depends on the median cost of that component. The rate is Case Mix Adjusted, based on the Case Mix described above.
Long Term Care Services and Supports (LTSS) is carved out of managed care in Indiana; however, many Indiana facilities have a small percentage of residents who are enrolled in the Healthy Indiana Plan (HIP) or in Hoosier Care Connect (HCC), two types of Medicaid plans with a short stay skilled nursing benefit.
To access the latest updates on nursing facility rates, please click here.
March 21, 2023: MDS Audit Results Not Reflected in Some Nursing Facility Rates
For rate effective dates July 1, 2020 through June 30, 2022, rate letters and the associated MDS resident rosters sent to Nursing Facilities did not include the impact of their MDS audit results. As required by the Medicaid State Plan, the fiscal impact of these MDS audit results must be reflected in the payments made to Nursing Facilities. The incorporation of the historic MDS audit results will result in payouts to 19 providers in the amount of $89,140 and recoupments from 163 providers in the amount of $1,424,441 for SFY 2021 and SFY 2022 combined.
In addition, due to the changes to reflect the historic MDS audit results and associated case mix index (CMI) adjustments, the SFY 2022 UPL Final Settlement that was originally scheduled for December of 2022 has been delayed to June of 2023. The Final Settlement will include the impact of changes for the MDS audit results and associated CMI adjustments. Providers who file a reconsideration request in relation to the settlement information will not be included in the SFY 2022 Final Settlement process in June. The SFY 2021 UPL Final Payment for the CMI changes will not be adjusted due to the UPL for that year already being closed.
Providers began receiving settlement letters on March 21, 2023. Myers and Stauffer has indicated that recoupments will be established as receivables in Gainwell’s system during the month of June. Amounts owed by providers will be withheld from claims payment by Gainwell and amounts owed to providers will be added to future claims payment.
Access OMPP here.
November 2023: New Indiana Medicaid Nursing Facility Reimbursement System
After over a year of meeting with hospital and nursing home representatives, including IHCA, FSSA has developed a new nursing facility reimbursement system. FSSA submitted a state plan amendment with the changes to CMS last month and is awaiting approval. The primary changes to the system are: moving the quality add-on from the base rate to the UPL, direct care and indirect care components change from being based on cost to being based on price, and the fair rental value system will incentivize building improvements. The transition to the new system will be gradual over several years with a full transition occurring in SFY 2028. You can find details in this presentation from our consultant, Tracy Mitchell of Bradley and Associates.
Assisted Living Facility Rates
Medicaid reimburses for Assisted Living services through the Aged & Disabled Waiver. Reimbursement and policy for the Aged & Disabled Waiver are within the Division of Aging. The administrative rules for rate setting can be found at 455 IAC 1, 2 and 2 at this link.
The DA recently obtained CMS’s approval to change its waiver provider rate methodology effective February 1, 2020.
Mass adjustment for waiver AL claims
OMPP announced in the attached Banner 202034 that initial Notices of Action (NOAs) for new monthly rates for AL waiver providers effective February 1, 2020 contained errors. As a result, a mass claims adjustment will occur beginning September 30. 2020.
The Home and Community-Based Services (HCBS) Provider Stabilization Grant Program is Now Open
Federal legislation (the American Rescue Plan Act) that was passed last year provided qualifying states with a temporary increase in federal matching funds for certain Medicaid expenditures for HCBS. Indiana submitted a HCBS Spend Plan to CMS for approval, which included a provider stabilization grant program.
FSSA recently announced that that HCBS Provider Stabilization Grant program is now open. Below are details about the program and the attestation process necessary for receiving grant funds.
Nov. 7: CMS approves new Assisted Living (AL) waiver rates retroactive to July 1, 2023
FSSA recently announced in Bulletin BT 2023141 that the Centers for Medicare & Medicaid Services (CMS) approved the AL waiver rate increase retroactive to July 1, 2023 dates of service. You can click here to view the rate table.
In addition, FSSA recently announced the AL waiver CY2024 Allowable Room and Board Rates. CY2024 Allowable Room and Board Rates.
End of Therapy in Nursing Facility Rate Calculation
Beginning with July 1, 2020 rates, the Office of Medicaid Policy and Planning (OMPP) will use end of therapy (EOT) dates in the nursing facility rate calculation. When an assessment is assigned a RUG-IV classification of “Rehabilitation (RAE, RAD, RAC, RAB, RAA)”, the Time Weighted CMI Resident Roster Report will examine the therapy start and end dates for each regimen of therapy (as provided on both the MDS and Web Portal submissions).
Each episode of therapy (the combination of physical therapy, occupational therapy, and speech-language pathology and audiology services (i.e. speech therapy) will then be evaluated to determine the final end date of the episode and assign the Rehabilitation day count to the assessment, ending on the final end of therapy date, on the Time Weighted CMI Resident Roster Report.
The final end date of the therapy episode will conclude the Rehabilitation day count and the assessment will be split (reclassified) to reflect a classification of “non-Rehabilitation” beginning the day after the final end date of the therapy episode.
The “non-Rehabilitation” RUG classification will continue the day count on the Time-Weighted CMI Resident Roster Report until; 1) the next assessment or tracking form; or 2) end of the quarter.
If no final end date for a therapy regimen is found or there is no designation that therapy continues via the web portal, an end date for Medicaid records will be assigned using the latest regimen start date.
Value Based Purchasing Program
Beginning with the July 1, 2019 Indiana Medicaid nursing facility rate effective date (RED), the current quality add-on rate component (the Value Based Purchasing Program) methodology will change. The point distribution for the new domains will be phased in over 2 years, July 1, 2019 and July 1, 2020. This is due to the new methodology moving away from a system dominated by the old Report Card Score, or survey performance, towards more reliance on bedside outcomes measured by the Long Stay Quality Measures (QMs) used by Five Star.
The new methodology is comprised of the following four domains, which are described in more detail below: Long Stay Five Star QMs; CMS Health Inspection Score; All Facility W2 Employee Retention; and Advance Care Planning Certificate. The quality add-on dollar amount will be based on the Total Quality Score (TQS). The maximum TQS is 100 and the point distribution for each domain are in the chart below.
Long Stay Quality Measures
The quality score values will use the ranges for the nine long-stay quality measures published in the January 2017 CMS Technical Users Guide for the Design of Nursing Home Compare Five-Star Quality Rating System. The QMs are: ADL Decline, Moderate/Severe Pain, High Risk Pressure Ulcers, Catheter Left in Bladder, Urinary Tract Infection, Physical Restraints, Injurious Falls, Anti-psychotic Meds, and Mobility Decline. At this time, the score will not be based on the updated guide published in April 2019. The score will be determined using the nursing facility’s most recently published four quarter QMs for the previous calendar year.
Each of the 2017 Long Stay QMs will be worth 100 points, therefore the maximum a facility could earn in this domain is 900 points. Facilities performing best will receive 100 points for each QM, and those performing at the bottom will receive 0 points. Points in-between 0 and 100 are awarded in increments of 20 points. Facility performance on each individual QM is based on the CMS published cut points in the January 2017 Technical Users Guide, however Total Quality Score points awarded to each facility are calculated based on that facility’s performance compared to other Indiana facilities and not based on CMS calculations.
For example, and based on prior modeling using older data, a facility that earns 800 total points due to quite good performance on QMs would receive 30 TQS points in year 1 (and assuming consistent performance 60 TQS points in year 2). A facility that is not performing as well that earns 600 total points via QMs would receive 9 TQS points in year 1 (and if not improved but maintained, 17 TQS points in year 2).
CMS Health Inspection Score
The Health Inspection Score points will be based on each facility’s most recently published CMS nursing home health survey score as of June 30, 2019, and each June 30 thereafter.
Click on “Export CSV for Excel” and go to Column BY, which is titled “Total Weighted Health Survey Score.”
The cut-points and associated quality points are detailed in the chart below. A facility with a score of 19 or lower will receive the maximum number of points. A facility with a score of 80 or above will receive zero points. Those with scores in between will received proportional quality points.
Total Employee Retention Rate
The rate will be determined using data from Schedule X, which can be found at this link and will be calculated as follows:
Points will be determined by using each facility’s most recently completed calendar year Schedule X submitted by the following March 31. The maximum number of points for both 2019 and 2020 for staff retention is 10 points. The cutpoints and associated quality points are below. A facility must have at least a 54% retention rate to earn points, and those with a 71% or greater rate will earn the 10-point maximum.
Advance Care Planning (ACP) Training Certificate
ACP training is a new requirement of the Indiana Value Based Purchasing (VBP)program. The training is a 4-hour online and on-demand program using the Relias platform. In order to earn the 5 points in 2019, at least one employee must have completed the training on or before June 30, 2019. For 2020 and 2021 and beyond, the requirements change. Details are below:
Effective July 1, 2020,
Nursing facilities that are a new operation shall be awarded five (5) quality points, retroactively applied to the quality score on their initial rate, if a minimum of one (1) employee has completed a level one advance care planning training program approved by the office within six (6) months of their Medicaid certification date.
- a minimum of one (1) employee must have completed a level one advance care planning training program, and
- the employee or employees must be employed by the nursing facility following their completion of the level one advance care planning training program during a minimum of six (6) distinct months of the calendar year ending December 31, 2019.
- Effective July 1, 2021 and thereafter,
- for the previous calendar year, a minimum of one (1) employee, which must not have previously completed the level one advance care planning training program, must complete a level one advance care planning training program, and
- the employee or employees must be employed by the nursing facility following completion of the level one advance care planning training program during a minimum of nine (9) distinct months of the previous calendar year; or alternatively
- for the previous calendar year, a minimum of one (1) employee of which must not have previously completed the level two advance care planning training program, must complete a level two advance care planning training program, and
- the employee or employees must be employed by the nursing facility following completion of the level two advance care planning training program during a minimum of nine (9) distinct months of the previous calendar year.
Managed Care
Long term care services (LTSS) are not covered under managed care in Indiana today but will move to a managed care model in 2024. Today, members can receive services in a nursing facility (NF) on a short-term basis. Managed care entities (MCEs) are liable for coverage up to 30 days for Hoosier Care Connect (HCC) and up to 100 days for the Healthy Indiana Plan (HIP). HCC is for individuals who are 65 years and older; blind or disabled; and are not eligible for Medicare. HIP is for individuals from ages 19 to 64 who meet specific income levels. Both programs are operated within a managed care system. The MCEs arrange, administer and pay for the delivery of health care services.
The MCEs for HCC are Anthem and Managed Health Services (MHS). More information about HCC as well as MCE contact information can be found at this link.
The MCEs for HIP are Anthem, CareSource, MDwise and MHS. More information about HIP as well as MCE contact information can be found at this link.
MLTSS Managed Care Entities (MCEs) Announced
On March 1, 2023, the Indiana Family and Social Services Administration (FSSA) and Department of Administration (IDOA) announced the following vendors have been recommended for award for the MLTSS (named the Indiana Pathways for Aging Program) program, which will begin in the summer of 2024.
- Anthem Blue Cross and Blue Shield (Anthem)
- Humana Healthy Horizons in Indiana (Humana)
- Molina Healthcare of Indiana (Molina)
- United Healthcare Community Plan (United)
FSSA will coordinate next steps with the MCEs in the contracting and readiness review process to prepare for the program go-live.
The IHCA/INCAL plans to host a number of education events to best position members for the MLTSS implementation. More details to come at a later date.
Additional Resources
Take Note: Indiana Medicaid Optional State Assessment Guidance
Effective October 1, 2019, the Medicare SNF Prospective Payment System will transition to the Patient Driven Payment Model (PDPM) for Medicare reimbursement.
IHCP Provider
The Indiana Health Coverage Programs (IHCP) offers providers easy access to the resources and tools needed to conduct business with Indiana Medicaid. Provider updates and announcements, important reference materials, and general program information are all available through links and web pages located on this website.
Myers and Stauffer
Myers and Stauffer LC is a certified public accounting firm that provides professional accounting, consulting, data management and analysis services to government-sponsored healthcare programs. Myers and Stauffer LC is a contractor for the Indiana Office of Medicaid Policy and Planning, the agency that administers the Medicaid Program for the state of Indiana. Their website hosts a variety of valuable resources.
Indiana Medicaid
Indiana’s Case Mix reimbursement system is complex and frequently changing. We track and provide guidance on a range of matters from new policies, cost report changes, audits and quality programs. We also engage in policy development and expansion on Medicaid Long Term Services and Supports and Medicaid Waiver and Home and Community Based Services.