DMAS to Reconsider Interim Rate Calculations

VHCA (8/1/2008)

On behalf of several members and representatives of accounting firms with member clients, VHCA requested that the Department of Medical Assistance Services (DMAS) reconsider the determination of the July 1, 2008 interim Medicaid payment rate.  This request focused on a number of facilities that experienced a decrease in their payment rate when more current cost report information indicated that the rate should in fact increase as of July 1st. Following a recent conference call that included VHCA member representatives and the DMAS, the Department has determined that it will modify the interim rates for providers with a July 1, 2008 interim rate that was below the prior interim rate (June 30, 2008) minus 1.329 percent on the operating component. 

In years that cost ceilings are not rebased, this approach is consistent with how DMAS would have treated interim rates for nursing facility providers.  Providers with questions or rate reconsideration requests should contact James Branham at 804.225.4587 or Jim Worrell at 804.786.1009. Before making a request, facilities are urged to determine if the anticipated final rate will exceed the revised interim rate. DMAS will only review revised interim rate requests as long as the rate based on the prior interim rate (as of June 30, 2008) less the 1.329 percent budget cut rate reduction factor is more than the July 1st interim rate communicated to the facility.

In general, the interim rate determination process effective with rebased ceilings on July 1, 2008 uses the most currently available cost information and case mix for the operating rate and the most recent settled capital cost and nurse aid training cost. The vast majority of providers receive increases because of the revised interim rates, despite the 1.329% budget cut also effective July 1, 2008.

DMAS has indicated that they are receptive to holding discussions focusing on our desire for a more comprehensive change to the interim rate determination process.  One alternative to be discussed is the setting of an interim rate based upon tentative settlement of submitted cost reports within a much shorter period of time.  Currently, rates do not reflect submitted cost report information until final settlement – typically four to five months following submission of the cost report and at least ten months into a provider’s new fiscal year.