Cost Report Audits
Non-Extensive Renovations
Extension of Enhanced Federal Match
July 1, 2010 Medicaid rates for Intermediate Care Facilities for the Mentally Retarded (ICFs/MR) will be set based on the December 31, 2009 cost reports. As in prior years, the rates for four cost categories will be subject to statutory inflation factors as follows:
|
Direct Care |
2% - 3% (estimated) |
|
Indirect Care |
6.9% (final) |
|
Capital |
.66% (final) |
As of December 31, 2009, the Bureau of Labor Statistics (BLS) is no longer tracking the factor that ODJFS previously used to determine inflation for Protected Costs. Therefore, we cannot estimate the final inflation factor. The previously used factor was tracking towards slight deflation when BLS stopped updating the factor.
The July 1, 2010 rates will be subject to a rollback if the statewide average rate exceeds $278.15. The statewide average rate is unchanged from July 1, 2009. However, the ICFs/MR Franchise Permit Fee will decrease from $14.75 to $13.55 on July 1, 2010, effectively putting additional dollars into the Medicaid system. We currently estimate that a rollback of 3.5% to 4.5% will be applied to all facilities’ rates.
As ICFs/MR rates continue to be set based upon a facility’s cost report, the cost reports remain subject to potential audit by ODJFS. The Ohio Revised Code allows for an audit report to be issued within three years from the date the cost report was filed. As a result, the 2006 cost reports, which set the July 1, 2007 rates, can no longer be audited by ODJFS. Cost reports for calendar years 2007, 2008 and 2009 remain subject to audit. Since Ohio’s ICFs/MR Medicaid reimbursement remain cost-based, we expect ODJFS to accelerate cost report audits over the coming years.
ODJFS has up to five years to issue a settlement for days and patient liability adjustments. Therefore, ODJFS was able to issue settlements for calendar year 2004 cost reports until April 15, 2010. Settlements for calendar year 2005 cost reports can be issued until April 14, 2011.
Non-extensive renovations (NERs) remain a viable option for ICFs/MR operators to increase their capital reimbursement without affecting their capital ceilings. NERs are subject to certain requirements and must be approved by ODJFS prior to beginning a project. If you are considering a future capital project, please contact us to ensure proper reimbursement.
EXTENSION OF ENHANCED FEDERAL MATCH
The U.S. Senate recently passed the American Workers, State, and Business Relief Act of 2010 (H.R. 4213), which includes a provision to extend the temporary increase in the Federal Medical Assistance Percentage (FMAP) included in President Obama’s original stimulus package through June 30, 2011. The enhanced FMAP payments are currently set to expire on December 31, 2010. FMAP represents the federal government’s share of a state’s expenditures for Medicaid. If the House passes the legislation and it is signed by the President, Ohio could receive an additional $600-$700 million in federal funds. Long-Term Care lobbying groups have suggested a number of uses for the additional funds, including reducing the nursing facility franchise permit fee back to $6.25 per day or paying the June 2011 ICFs/MR vendor payment on time, rather than delaying the payment until July 2011, as required by ASHB1. Many interested parties will be looking for additional funding from these funds; however, with the next budget looming as potentially worse than the current budget, legislators might be reluctant to spend these funds quickly.