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Date ArticleType
7/5/2017 Payment/Reimbursement
IHCA Comments on Indiana Medicaid Payment Regulation

On June 15, 2017 IHCA submitted comment to Indiana Medicaid concerning the promulgation of a regulation primarily aimed at changing the nursing facility payment methodology from RUGs III 34-grouper to RUGs IV 48-grouper.  Though this change of RUG categorization systems occurred a year ago, the state has finally promulgated a rule to finalize the move.  Though the rule appeared to focus on the RUG categorization change, the rule also included two significant reimbursement policy changes that IHCA has been vocally opposed to since learning of them in the summer of 2016. 

The rule proposes to change how Nurse Consulting costs are reimbursed and moves most of those costs from Direct Care to Indirect Care.  This recategorization to Indirect Care is a small victory for the profession because Indiana Medicaid originally planned to move most Nurse Consulting costs to the Administrative component, which would have had a larger negative impact on rates.  Indiana Medicaid contends that most Nurse Consulting is not “directly related to the provision of hands on care.”  It is this exact language which is in the definition of Direct Care, so to get reimbursed for Nurse Consulting in the Direct Care component a facility must demonstrate that the Nurse Consulting Services are “directly related to the provision of hands on care.” Of course, what this means is unknown – it isn’t defined. 

We know that Indiana Medicaid has been recategorizing Nurse Consulting costs from Direct Care to Administrative through the audit process in the past 2 years.  During those audits, Indiana Medicaid has at least objected to Nurse Consulting being direct care when those services are aimed at MDS consultation (other than data input and coding), quality assurance processes, and health survey preparation.   These are broad categories within which there are specific activities that absolutely relate to the provision of hands on care.  Due to the ambiguity, providers will be forced to continue to appeal Indiana Medicaid rate setting and audit actions in this space.

The second item that IHCA is concerned with is a new 10% rate penalty for failure of a facility to comply with Indiana Medicaid field audit scheduling and documentation production.  The new language in the rule requires scheduling of the field audit 60 days in advance of the audit visit, provides 30 days to the provider to submit required documentation for the audit visit, and provides for a one-time postponement of the audit visit.  Failure to comply could lead to a 10% rate penalty.  IHCA has been told that the new language is aimed at a small group of non-compliant providers.  IHCA has taken exception to this approach as there are other existing mechanisms in the rule to deal with providers that are non-compliance in the audit process and this language is unnecessary to deal with the stated issue.

IHCA President Zach Cattell is in continued discussion with Indiana Medicaid regarding these two provisions.  Future rulemaking will occur due to the extension of the Quality Assessment Fee and we hope that some clarification and relaxation of these provisions can occur in that rule. To read IHCA’s comments, click here. To read the regulation, which is now final, click here (see pages 15 and 16 for the Nurse Consulting definition and page 18 for the field audit language).

Contact Zach Cattell with questions or comments at zcattell@ihca.org.