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Date ArticleType
10/3/2016 Payment/Reimbursement
Indiana Medicaid Submits State Plan Amendment on RUGs IV and Other Changes

On September 14, 2016, Indiana Medicaid submitted a State Plan Amendment (SPA) to the Centers for Medicare and Medicaid Services to approve a move from RUGs III 34 Grouper to RUGs IV 48 Grouper for the Indiana nursing facility reimbursement system.  If approved, that SPA will be retroactive to July 1, 2016, which is why Indiana Medicaid is already issuing rates under the new methodology – it is expected to be approved.  The IHCA worked hard to ensure that the RUGs IV 48 Grouper would be used, rather than the RUGs IV 66 Grouper that is meant for Medicare residents which is what Indiana Medicaid wanted to use and would have created a large cut in Medicaid reimbursements.

There are, however, other elements of this SPA that have nothing to do with the RUGs system.  Namely, Indiana Medicaid seeks to change how nurse consulting services are reimbursed and change the provider audit process. IHCA, along with colleagues at LeadingAge Indiana and HOPE, expressed concern with these proposed changes back in July of this year (click here for the comment letter).  In response to this letter and a meeting that IHCA arranged, Indiana Medicaid did make positive change to the language concerning the provider audit process. However, Indiana Medicaid has not altered language that would move most corporate/home office nurse consultant costs from the Direct Care component to the Administrative component.  IHCA is in the process of proposing alternative language to Indiana Medicaid in hopes for a compromise.

The next steps in this process are for CMS to review the submitted SPA and likely ask questions of Indiana Medicaid about it, and also for Indiana Medicaid to hold a public hearing on the parallel changes to the Indiana Administrative Code that will be required to fully effectuate these changes. IHCA is prepared to engage in that public hearing process.