State Residential Care and Assisted Living Policy: 2004. Rates Based on Case-Mix Systems

03/31/2005

Several states have adopted payment systems based on their nursing home case-mix methodology. Like tiered rate approaches, the case-mix approach creates incentives to serve more impaired residents by linking reimbursement to the level of care needed. Case-mix approaches typically have more categories that tiered rates. The case-mix approach requires extensive functional and health data for residents.

  Impairment  
Level
  Service Priority   Service R&B Total Rate
TABLE 1-15. Oregon Service Priority Categories and Payment Rates: Assisted Living (July 1, 2004)
Level 5 Dependent in 3 to 6 ADLs OR dependent in behavior and 1 to 2 other ADLs $1,944.02   $455.70   $2,399.72  
Level 4 Dependent in 1 to 2 ADLs OR assistance in 4 to 6 ADLs plus assistance in behavior $1,574.64 $455.70 $2,030.34
Level 3 Assistance in 4 to 6 ADLs OR assistance in toileting, eating, and behavior $1,204.07 $455.70 $1,659.77
Level 2 Assistance in toileting, eating and behavior or behavior AND eating or toileting $910.23 $455.70 $1,365.93
Level 1 Assistance in 2 critical ADLs or assistance in any 3 ADLs or assistance in 1 critical ADL and 1 other ADL $688.36 $455.70 $1,144.06

 

    Assisted Living  
Apartment
  Double Occupancy  
Apartment
  Residential Care  
Non-Apartment
TABLE 1-16. Texas Reimbursement Rates Effective January 1, 2004
AL 1   $59.88 $53.29 $37.35
AL 2 $55.78 $49.19 $33.25
AL 3 $50.18 $43.59 $27.66
AL 4 $52.38 $45.80 $29.85
AL 5 $47.16 $40.58 $24.64
AL 6 $45.74 $39.15 $23.21

Both tiered rates and case-mix rates are subject to "category creep" or "gaming," a tendency for facilities to interpret assessment data to support payment of the next higher rate, or to request an adjustment because the resident has become more impaired and requires more staff support than upon admission. To address "gaming," states may use an assessment by an independent case management agency to determine the original payment level. Subsequent requests to adjust the payment level can be reviewed by either a case management agency or the state agency before being approved. Five states use tiered rates, examples of which are described below.

  • Washington uses a 12-payment level rate structure for waiver services provided in homes and residential care settings. A case manager conducts a comprehensive assessment to measure level of need and the appropriate rate tier. Three sections of the assessment are used to set the payment level based on a score: health status, psychological/social/cognitive status, and functional abilities and supports. Individuals must be substantially or totally impaired in an ADL to receive a score. Points are also assigned for impairments in speech, sight, and hearing, the number of medications, disorientation, memory impairment, impaired judgment, wandering, and disruptive behavior. The total score determines the payment level. A computer program reviews the assessment and determines the residents "level" and payment amount.

  • New York modeled its reimbursement rates on its case-mix system for paying nursing homes. The service reimbursement is set at 50 percent of the Resource Utilization Group (RUG) rate for nursing home residents. The state has created RUG rates for 16 geographic areas of the state. The reimbursement category is determined through a joint assessment by the Assisted Living Program and the designated home health agency or long-term home health care program. The Department of Social Services' district office reviews the assessment and the RUG category. In 2004, the combined SSI and state supplement rate was $999 in New York City, Nassau, Suffolk, and Westchester counties and $969 in the rest of the state. Beneficiaries retain a personal needs allowance of $127 and the balance is paid to the facility for room and board.

  • North Carolina covers personal care in adult care homes as a Medicaid state plan service and uses a modified casemix payment system. The payment includes a flat rate for basic personal care with add-ons for residents with specific ADL impairments. Residents with extensive or total impairments in eating, toileting, or both eating and toileting qualify for a higher rate. In 2004, the basic payment is $16.74 for facilities with 30 or fewer beds and $18.34 for facilities with more than 30 beds. The additional daily rate for residents with extensive or total impairments in eating is $10.33, toileting $3.69, and impairments in both eating and toileting are reimbursed at $14.02. An additional payment for residents needing assistance with ambulation/locomotion is $2.64 a day. These payment levels are in addition to the basic rate. Eligibility for the additional payment is based on an assessment by the adult care home, which is verified by a county case manager. The state SSI and state supplement payment standard is $1,112 monthly room. The resident keeps $36 a month for personal needs and pays the remaining $1,066 to the facilities for room and board.

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