Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. Service Rates

12/01/2003

  • Wisconsin does not set RCAC service rates for Medicaid waiver clients. Reimbursement is based on cost consistent with the maximum Medicaid waiver reimbursement for RCACs, which is capped at 85 percent of the average cost of nursing home care to the Medicaid program--$73.50/day or $2,263/month. However, counties are budgeted for only $41.86/client/day or $1,280/month and must keep spending for their entire waiver caseload within this average amount.

    Because the waiver reimbursement cap is double what is actually available under the waiver program, the result is that few waiver clients are served in RCACs. One respondent expressed concern about people who spend down in RCACs having to move because the waiver program will not cover the cost of services, assuming that a waiver slot is even available.

  • Service rates are negotiated between the county and the facility, consistent with guidelines set by the state. If the negotiated rate turns out to be higher than allowable costs,11 the facility must give back the difference at the end of the year. Some counties also negotiate room and board rates on behalf of their waiver clients. Many counties lack the expertise to contract effectively and to enforce the profit limit, and counties often feel pressured to pay the maximum rate, which includes a high profit margin. The state is working to develop a more effective contracting process wherein the service rate will be tied to the care plan and will vary according to the services provided rather than a flat rate.


11. Most county contracts are for cost-based rates. Allowable cost distinguishes between what costs can be paid for with state/federal funds and what cannot; it says nothing about how much the rate is. The State requires an audit where publicly purchased services cost more than $25,000 per year. If the audit shows costs that were not allowable, which have been paid for in the rate, they must be returned.

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