Inaction by State Government on State Plan Amendments related to public nursing home rates to cost County nearly $60,000 in increased local match on New Year’s Day, and potential loss of $900,000 if Federal Government reverses policy decision   

(Liberty) – County Manager David P. Fanslau announced that Sullivan County has yet to receive the promised Inter-Governmental Transfer (IGT) payment for 2009 that also backlogs the 2010 IGT payment and undermines reliance on an IGT payment for 2011.  The New York State Department of Health (NYSDOH) delayed the formal submission to the Centers for Medicare and Medicaid Services (CMS) and the State has apparently failed to complete the submission and obtain the approval of the necessary State Plan Amendments (SPAs) to establish the nursing home rate for 2009 (rebasing), which can then allow for the calculation of the Upper Payment Limit (UPL) necessary to establish the IGT amount per facility.

The painfully long application and approval process that the NYSDOH and CMS have been working through will stretch beyond the end of this calendar year.  “The percentages will change once 2010 ends, which is a milestone date under the federal ARRA and FMAP programs,” said Fanslau. “The federal match will drop - where it ends up is clouded by a couple of big factors, but the ARRA enhanced FMAP rate changes as follows: Until December 31, 2010 the FMAP rate for New York State is 61.6%; *January 1st to March 31, 2011 the FMAP rate for NYS will likely be 58.77%; and *April 1st to June 30, 2011 the FMAP rate for NYS will likely be 56.88% - * These are estimates that assume NYS unemployment rate does not fall much more as the enhanced FMAP under ARRA is directly linked to the unemployment rate.  The further out this process goes the lower the federal match will be (meaning a higher local match),” added Fanslau.

 

Correspondingly, counties weekly matches for Medicaid will increase throughout the year as the ARRA benefit is phased out.  There is no expectation at this time that the new Congress will entertain another extension of this enhanced rate.  Weekly matches will likely increase in the range of 3% for all counties for the first quarter of 2011 and then increase again in the second quarter and again for the last half of the year proportionate to the ARRA FMAP phase out described above.      

 

A second complicating factor is that CMS is "rethinking" their earlier decision to provide the enhanced ARRA match to IGT payments (nursing homes and hospitals) -- they are arguing that the normal FMAP rate of 50% should have been used for IGTs.  The New York State Association of Counties (NYSAC), New York City, and the State are fighting this interpretation vigorously.  CMS's own guidelines seem to contradict their new interpretation in that CMS guidelines state that enhanced ARRA FMAPs are related to "date of payment, and not date of service".  The NYS DOH is sending a second letter to CMS again reiterating the legal opinion supplied earlier and also addressing issues CMS has recently raised about some of the IGT payments falling outside of the 2-year claiming limit.

 

“Where the enhanced FMAP ends up along this spectrum of possibilities is uncertain.  This uncertainty by NYSDOH and CMS is a causal factor in cash flow issues, but more importantly underscores the reality that reliance upon the IGT is risky, and will certainly add costs to the property taxpayers,” said Fanslau.  “The failure to complete the necessary SPA’s and certify the UPL that would authorize the IGT prior to New Year’s Eve, will add nearly $60,000 to the amount that Sullivan County will be required to match to realize the 2009 IGT,” said Fanslau.  “If the CMS reverses its previous decision that counties were told by NYSDOH to rely upon, then Sullivan County would have to fund another $900,000 for a benefit that has already been received, and would effectively result in having to refund the federal government,” added Fanslau.

 

“The continued pattern of inconsistency in reliable revenues associated with State and Federal funding for public nursing homes, adds to the pressures that County property tax levies will have to absorb in succeeding fiscal years.  NYSDOH communicates an IGT and required match in 2009, only to have that required match increase over time due to inaction is inequitable to County Governments that operate public nursing homes throughout the State,” concluded Fanslau.

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For more information, please contact David Fanslau at 845-807-0450

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