The 2021 General Assembly directed DMAS to develop a Medicaid Nursing Facility Value-Based Payment (VBP) program to replace the current $15 per day add-on when it expires on June 30, 2022. DMAS was directed to work with stakeholders, including VHCA-VCAL, to develop the VBP plan by December 31, 2021. The planning process is still underway, but significant progress has been made (kudos to DMAS, Mercer, which has acted as a consultant, and the stakeholders).

Based on CMS requirements relative to value-based programs, there has been a realization that in order to make VBP payments in state fiscal year (SFY) 2023 (July 1, 2022 – June 30, 2023), the metric measurement period must have begun no later than October 1, 2021. As such, we are communicating as much of the detail of the VBP program as of today, with the understanding that there are still issues being considered and changes could occur. However, the following represents important details that are highly likely to be in the program design, with potential changes noted as necessary. 

Overall Funding 

The expectation is that the VBP program will be funded at the equivalent of the value of the $15 per day (approximately $93.5 million) and will go into effect beginning July 1, 2022. In the first year of the program, 50 percent of the available funding will be awarded based on six metrics, with amounts available for both “attainment” and “improvement” if relevant thresholds are met (discussed in more detail below). The other half of the funding will be a general distribution (to all Medicaid NFs based on Medicaid days), although there is still an active discussion on exactly how this part of the funding will be disbursed (possibly a $7.50 add-on like the current $15, or possibly a lump sum payment at some point in the SFY). In the second year, 75 percent of the funding will be metric based, with the remaining 25 percent (or the equivalent of $3.75 per day) as a general distribution. 

Metrics

There will be six metrics in the VBP program in the initial (at least) two years based on authorizing language by the General Assembly. These are existing metrics already reported by nursing facilities. There is no additional reporting required by this program, however, timely and accurate reporting will be necessary in order to be awarded payments.

These metrics are:

1. Registered Nurse 8 Hour Staffing
2. Total Nurse Staffing: Case Mix Adjusted
3. Percent of Long Stay Residents with a UTI
4. Percent of Long Stay Residents with a Pressure Ulcer
5. Hospitalizations per 1,000 Long Stay Resident Days
6. Emergency Department Visits per 1,000 Long Stay Resident Days

Base and Measurement Period

The base period “score” on each metric will be collectively utilized in setting the attainment thresholds and will individually serve as the basis for the determination of facility-specific improvement. For the first two years (at least) of the program, the base period will be calendar year (CY) 2020 for all measures except the RN 8 hour staffing. For the RN 8 hour staffing, the base period will be CY 2019 or possibly a more recent quarter in 2021 (this is an active discussion and the final decision will be communicated when available). This distinction on RN staffing is due to the lack of consistent PBJ reporting in 2020 due to COVID-19. There is also considerable discussion around the base period for the total case mix adjusted staffing; the current model only utilizes only a single quarter (CY Q4, 2020) again due to PBJ reporting concerns, but it is unclear if this is a final decision.

For all metrics (with the possible exception of the total case mix adjusted staffing, which again, might just be one specific quarter), the measurement period for the first year is October 1, 2021 through September 30, 2022 (i.e., it has already started). The scores obtained from the measurement period will be the basis of determining what level of attainment has been reached, if any, and/or if improvement targets have been reached.

Attainment and/or Improvement

VBP awards will be made based on attainment and improvement relative to the pre-determined performance thresholds and base period scores, respectively. For each individual metric, the base period data across all facilities will set thresholds at the 25^th, 50^th, and 75^th percentiles of performance. These will be static and not adjusted based on the measurement period. A base attainment award payment amount per Medicaid day (managed care days only for facilities in CCC Plus; FFS days only for eligible facilities carved out of CCC Plus) will be calculated on a graduated scale.

• If the score is in the “Best” attainment level (>=75^th percentile), the facility would receive 100 percent of the base amount per day.
• If the score is in the “Better” attainment level (>= 50^th/ <75^th percentile), the facility would receive 75 percent of the base amount per day.
• If the score is in the “Fair” attainment level (>=25^th/ <50^th percentile), the facility would receive 50 percent of the base amount per day.
• If the facility score is below the 25^th percentile, the facility would be ineligible for an attainment award on that particular metric.

For improvement, facility-specific scores during the measurement period will be compared to the facility-specific base year scores.

• If the measurement period score for any of the metrics other than total case mix adjusted staffing is >= 5.0 percent (not five percentage points) better than the base period score, the facility would qualify for an improvement payment for that particular metric.
• If the 5 percent improvement is not reached, the facility would not qualify for an improvement payment.

For total case mix adjusted staffing, it is the same concept, but the threshold is 0.5 percent in place of 5.0 percent, so it is a much lower threshold to show improvement on the total staffing metric.

Important note: A facility can receive both an attainment and an improvement award for the same metric in the same year. However, for the two staffing metrics, once the facility has attained in the “Best” category, the facility will no longer be eligible for an improvement award. This would not apply to the first year that a facility reaches the “Best” level but would apply to subsequent years as it remains in the “Best” level.

Individual Metric Funding

Under the current model shared by DMAS, 80 percent of the available metric-based funding is allocated for attainment awards, with 20 percent for improvement. This distribution is actively being discussed, so the allocations may change in the final plan. Unlikely to change, the following represents each metric’s percent of the available funding:

Conclusion

VHCA-VCAL will be communicating the final VBP program design once various outstanding issues have been addressed by the end of December. However, given the overwhelming likelihood that the measurement period for these six measures has already begun, we believed it imperative to get as much detail to you as quickly as possible. We recognize that the fact that the measurement period has already begun is not ideal, but the VBP program represents an unprecedented opportunity to earn additional payment under Medicaid while positively moving the needle on quality of care. Keep in mind that the timing concern is a first year-only concern; the measurement periods will remain consistent going forward, thus with ample notice.

We realize this is a substantial amount of information to consume. As the plan is finalized and clarity on the remaining issues is achieved, VHCA-VCAL will relay that information to you and conduct educational programs to communicate the final details of VBP program. In the meantime, if you have questions or concerns, please email Steve Ford and/or April Payne.