This bulletin serves as notice to all Skilled Nursing Facility (SNF) providers that the SNF Fair Rental Value (FRV) changes noted below have been approved by the Centers for Medicare and Medicaid Services (CMS) in North Carolina State Plan Amendment (SPA) 21-0024 and accompanying updated prospective rates have been implemented in NCTracks. Effective retroactively to Oct. 1, 2021, the reimbursement methodology used to calculate the FRV rate components will be executed as specified in the SPA. This updated methodology includes the following changes:
- Updated the cost per square foot based on the RSMeans data publication.
- Modified the standard square feet per nursing bed to compare actual square feet per nursing bed to a maximum and minimum square footage per nursing bed.
- Decreased the minimum occupancy percentage of the annualized licensed capacity of the facility.
- Updated the fixed capital replacement value for equipment.
- Modified the maximum calculated age of a nursing facility to incrementally increase by one year for a five year period.
- Added a maximum FRV per diem increase allowed for nursing facilities over the maximum age.
- A one-time allowance for determining Medicaid rates effective April 1, 2022, recognized completed capital data survey data covering a twenty-four month period ending September 30, 2021 to be included in the aging calculation.
- Moved to a time-weighted methodology for determining the facility case mix index for Medicaid rates effective April 1, 2022.
Note that NC Medicaid has also initiated the transition from the Point-in-Time Case Mix Index (CMI) reporting method to the Time-Weighted CMI reporting methodology. Please refer to the bulletin published June 15, 2021 for additional details regarding training that was offered to providers.
Both the FRV and Time-Weighted CMI methodology changes will need to be factored retroactively into SNF rates. The details of how NC Medicaid will make these adjustments are as follows:
- Purpose: To make retroactive changes to SNF rates to reflect implementation of FRV changes and transition to the Time-Weighted reporting methodology for the following quarters:
- October 2021 – December 2021
- January 2022 – March 2022
- April 2022 – June 2022
The new prospective rates will be implemented during the first week of July 2022. Fee
schedules can be found on the NC Medicaid website. These rates will be applied
retroactively to the quarters specified above at a time still to be determined.
- Action: The affected claims will be systematically reprocessed as adjustments. No provider action is required.
- Timing: Additional detail regarding the reprocessing schedule will be provided in a future communication.
- Remittance Advice (RA): Reprocessed claims will be displayed in a separate section of the paper RA with a unique Explanation of Benefits (EOB). The identifying EOB code and description will be provided in future communication.
The 835 electronic transactions will include the reprocessed claims along with other claims submitted for the checkwrite. There is no separate 835. Please note that depending on the number of affected claims you have in the identified checkwrite, you could see an increase in the size of the RA.
- Important Reprocessing Information: Reprocessing does not guarantee payment of the claims. Affected claims will be reprocessed. While some edits may be bypassed as part of the claim reprocessing, changes made to the system since the claims were originally adjudicated may apply to the reprocessed claims. Therefore, the reprocessed claims could deny.
If the reprocessed claim denies and there are not sufficient funds to satisfy the full recoupment amount from claims paid in the current checkwrite, an Accounts Receivable (AR) will be created. Recoupment of the AR will begin with the subsequent NCTracks checkwrite and will continue for each checkwrite until the full amount due is recouped.
- If funds are insufficient to collect the full amount due from the NPI for which the AR was generated, NCTracks will automatically seek to recoup the AR from other NPIs with the same Internal Revenue Service Taxpayer Identification Number. For more information about the AR process, see the Feb. 29, 2016 announcement.