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Date ArticleType
5/1/2017 Payment/Reimbursement
Indiana Medicaid Nursing Facility Value Based Purchasing – Change is Coming!

It has been three years since the current Medicaid Value Based Purchasing (VBP) methodology was implemented for Indiana’s nursing facilities.  Discussions with the Indiana Division of Aging (DA) and the Office of Medicaid Policy and Planning are culminating in what will be the next phase Indiana’s program to incentivize quality improvement through the Medicaid nursing facility rate methodology.  While more work is needed, it is anticipated that the new methodology will be effective for the July 1, 2018 rate effective date – a little more than 1 year from now.

When Indiana’s Quality Assessment Fee (QAF) was implemented between 2003 and 2005, the state agencies had a goal of eventually tying some of those dollars to specific metrics.  Over the years, the IHCA has cooperated with the DA and OMPP to develop the VBP programs.  The VBP program started off by paying an incentive solely based on the facility’s performance under the Indiana State Department of Health’s (ISDH) Report Card Score.  The next phase, which is what we currently operate under, mixes the Report Card Score with seven staffing measures, mainly focused on retention and turnover and nursing hours per resident day.  Criticisms of these programs include too much reliance on the Report Card Score, which can be volatile, too many different metrics on staffing that really measure the same thing, and no focus on the Quality Measures that are impacted by daily nursing activities.

Though the final touches and modeling have not been completed on the next phase in Indiana’s Medicaid nursing facility VBP program, the framework has essentially been agreed upon through a committee that the DA and OMPP assembled last year.  The IHCA has participated on this committee through IHCA members Mary Pankey (CarDon & Associates) and Teresa Wallace (TLC Management), and IHCA staff via Zach Cattell, IHCA’s President.  IHCA’s trade association colleagues at HOPE and LeadingAge Indiana have also participated, as well as physicians from the IU School of Medicine, faculty from the University of Indianapolis, the long-term care division staff from the ISDH, and OMPP rate setting contractor Myers & Stauffer.

The framework from the committee, which has regularly been discussed and considered by IHCA’s Payment/Reimbursement Committee, focuses on several key concepts:  (1) alignment of the methodology to other existing incentives or measurements from CMS and Accountable Care Organizations (hospitals/physicians); (2) simplifying the methodology so that it is more understandable; and (3) focus the methodology more on clinical outcomes and quality of life measures that can be impacted directly by clinical staff.

After months of meetings, the framework is complete and is described below.  Next steps include deciding on how much weight any of the domains are given, modeling the financial impact of those weighted domains, determining a firm implementation timeframe, and writing administrative rules and a State Plan Amendment. 

General Methodology
Like today, facilities will be able to earn up to 100 Quality Points to make up a Total Quality Score.  Depending on how many points are earned, up to $14.30 per patient day is paid to each nursing facility.  The cut points for how much of the $14.30 can be earned have not yet been set, but the DA and OMPP have agreed that a similar distribution of facilities earning none, some, or all of the add-on will be maintained in the new methodology.

Proposed Domains and Potential Weights
Long Stay Quality Measures – Potential Weight: 60 Quality Points / Current Weight:  none
• Score would be derived from the 9 long stay quality measures used in the Five Star Rating program created by CMS.  The system would use each facility’s performance as reported by CMS, but Indiana would set its own cut points on how much a facility would earn out of the eligible Quality Points.  An example model has been created and can be accessed by clicking here. The model shows how many of the 60 points a facility would earn based on the 9 long stay measures.

Report Card Score - Potential Weight: 25 or 30 Quality Points / Current Weight: 75 Quality Points
• Score derived from nursing home survey findings, as calculated by the Indiana State Department of Health, as of June 30 of each year.
• This is the most significant change in the new program.

Facility Staff Retention – Potential Weight: 10 or 15 Quality Points / Current Weight: 15 Quality Points
• The new measure would focus on all W2 employees in each nursing facility and measure retention of all of those employees over a calendar year.  This includes clinical, administrative, and support staff – any employee that is a W2 wage earner.
• This differs significantly from the 7 separate measures that look at retention and turnover of CNAs, licensed nursing, DONs, Administrators, as well as nursing hours per resident day.

Advance Care Planning Certificate – Potential Weight: 5 or 10 Quality Points / Current Weight: none
• Score would be derived based on a facility’s employment of an individual or individuals for 9 of 12 months that has completed a 4-hour online and on-demand Advance Care Planning certificate course that is being developed by the IU School of Medicine, the University of Indianapolis and the DA. 

More work is ahead before the new program is finalized and IHCA will keep you updated.  If you have specific questions, please contact Zach Cattell at zcattell@ihca.org.