Ronald Fatoullah & Associates - Elder Law

Nursing Home Transition To Medicaid Managed Care


Over the past two years, Medicaid home health care has transitioned over to Managed Long Term Care (MLTC). The same process is now going to take place in the nursing home arena. Conversion of the nursing home population to MLTC is scheduled to begin on June 1, 2014 in New York City, Nassau, Suffolk and Westchester Counties. Current residents of nursing homes will maintain their present status and will not be required to enroll in a managed long term care plan. Individuals currently enrolled in Medicaid Managed Care Plans (MMCPs or Plans) will not be disenrolled if they require long term care placement.

For Medicaid applications that are already in process as of June 1, applicants will not fall within mandatory enrollment. Residents of nursing homes that do not contract with a current long term care plan will not be required to move to another facility. Further, there is no "locking." In other words, members can change Plans and are not limited to the one they initially sign up with. If a Plan does not have a nursing home to meet the needs of a member it must authorize out of network placement. In addition, if beds are not available at the time of placement, the Plan must authorize out of network placement.

For the first three years after mandatory enrollment, the Plans will be required to pay nursing homes the fee for service rate or a rate negotiated between the parties. After the passage of three years, the rate will solely be a negotiated rate.

Nursing home residents' pharmaceutical expenses will be covered by MMCPs. Without a negotiated agreement during the three year transition period, the MMCPs must honor the current arrangements that nursing homes have with pharmacies. If an enrollee is using a non-formulary drug, MMCPs must allow the member to continue to receive the drug for 60 days. After 60 days, the Managed Care Organization (MCO) and provider may transition the member to a different drug that is on the Plan's formulary.

MCOs have to continue to follow the current methodology of bed hold during the transition period. According to the New York State Department of Health (DOH), providers will need to learn how to bill the Plans. Training sessions will be provided for this purpose. The DOH has stated that it is trying "not to add red
tape to a nursing home's requirements."

Under the new system, the application process will begin as follows: nursing home placement will be recommended by a doctor or clinician based upon medical
necessity and other factors. The nursing home will then relay the recommendation and supporting documentation to the MCO for review and approval. Once the
MCO has authorized placement, the nursing home must submit the LDSS 3559 Form to the Medicaid Agency. After the budgeting is completed by the county, a Restriction/ Exception Code (known as R/E code or "N code") will be utilized and the MCO will be responsible for payment. The Medicaid eligibility determination will be the same as it is now, including the 60 month look back.

The local DSS will enter specific Restriction/Exception (R/E) codes into the Waiver Management System (WMS) to identify the type of long term placement for managed care enrollees. These R/E codes will appear on plan rosters. ePACES will also reflect this information. MCOs will receive pertinent enrollee information via the Roster system. Included on the roster will be the MCO Rate code, nursing home Provider ID, effective date of long term placement, exception code (R/E) and the NAMI (net available monthly income) amount. Nursing homes will continue to receive their fee for service roster (as opposed to the MCO roster) under the current system.

Those residents incurring a Medicaid penalty period will remain in the Plan's enrollment, but the Plan will not pay the nursing home bill until the penalty period has passed. The MCO is responsible for collecting any NAMI but may delegate this function to the nursing home.

Once an individual is placed, the MCO will be part of care plan development. The MCO will arrange for an assessment every 6 months and may review for service coverage and medical necessity. The MCO reauthorizes the stay and oversees the quality of care. The nursing home must notify the MCO of a patient's transfer to a hospital and the name of such hospital. The MCO must also authorize transfers to a non-network hospital.

There is still much confusion and many outstanding questions, to which answers have not yet been provided. As such, all are waiting to see how the roll out will ultimately be implemented.

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