FMAP & RUGs IV Update

VHCA (7/2/2010)

As Congress departs for its 4th of July recess, the extender bill containing the enhanced Federal Medical Assistance Percentage (FMAP) extension remains on the backburner. Senate business concluded earlier than planned due to the death of Senator Robert Byrd (D-WVA). The bill is still very much alive, though Republicans have indicated that they will not vote for it unless it is fully paid for.

The House and Senate are not scheduled to return until the week of July 12th, with the House not returning for votes until the evening of July 13th. That leaves only 2ý to 3 weeks remaining before the August recess. Members will then be out of town until mid-September so the opportunities to pass legislation keep narrowing.

The American Health Care Association (AHCA) has advised us that the House and Senate may be considering a small non-controversial health care technical fix package which would include the RUGS IV issue. The provision would essentially allow RUGS IV to be fully implemented on October 1st, as previously contemplated by the Center for Medicare and Medicaid Services (CMS) Final Rule issued in 2009. AHCA has been told that the bill may contain a variety of other non-controversial health care issues as well, the details of which have not been released. If this package moves forward, it would likely be completed before the end of July. AHCA has also been advised that the bill would NOT contain an extension of the therapy caps exception. That provision is scheduled to be considered in a likely lame duck session after the November election.

Given the linkage between the enhanced FMAP extension and Virginia funding for Medicaid provider payment rates, the initial 3% reduction adjustment of nursing facility payment rates has been reported for September 30 fiscal year end facilities who have received their Notice of Amount of Program Reimbursement letters from Clifton Gunderson. From recent discussions with senior staff of the Department of Medical Assistance Services (DMAS), it is our understanding that the Department is implementing the 3% reduction to rates solely for facilities subject to cost report settlement. At this time, no reductions to interim payment rates for other facilities have been implemented ý however, this may change as DMAS receives additional guidance from the McDonnell administration.