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Governor's Budget for FY 2014-FY 2015 Biennium Initial Review - Nursing Facility Rates

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The budget released today includes two items related to Medicaid nursing facility rates. First, it removes $53.4 million in FY 2014 and $81.0 million in FY 2015 from Medicaid spending estimates related to savings associated with eliminating the scheduled rebasing of rates effective July 1, 2013 and a 2% inflation add estimated for July 1, 2014. Second, the budget includes savings of $11.0 million in FY 2014 and $14.8 million in FY 2015 to reduce 75% of “enhanced funding” received by nursing facilities in SFY 2013 as a result of the two provider tax funded rate increases granted since July 1, 2012. The reduction equates to approximately a 1.2% rate decrease.

The "75% reduction to enhanced funding" adjustment was computed as follows based upon information included in the Budget-in Detail.

$’s Millions
Annualized Cost of 7/1/11 (3.7%) and 7/1/12 (0.33%) Rate Increases$59.0
Annualized User Fee Payment Increase (7/1/11 and 10/1/11 Increases)(39.3)
Net “Enhanced Funding” to Nursing Facilities

$19.7

75% Reduction to Enhanced Funding - Partial Year Impact
FY 2014

($11.0)

75% Reduction to Enhanced Funding - Full Year Impact
FY 2015
($14.8)

We will continue to review and analyze information included in the budget documents released today. It is important to note that while the budget document includes Department of Social Services requested nursing facility service funding levels for FY 2014 ($1.306 billion) and FY 2015 ($1.311 billion), there are no comparable line item amounts under Governor’s recommended columns for those years as service type line item accounts are consolidated into a single Medicaid total.

 
 
 
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