Congress Boosted Medicaid Match To Help Fight COVID-19 — But Many States Left Nursing Homes Out

May 17, 2020, Maggie Flynn, Skilled Nursing News - One of the first legislative packages designed to help the U.S. navigate the fallout of the COVID-19 pandemic included an increase in the federal matching funds for state Medicaid programs during the emergency period related to the coronavirus.

And a second major aid package under debate would go even further to increase federal dollars for Medicaid.

But though the majority of patients in the nation’s nursing homes are covered by their state’s Medicaid programs, the 6.2% increase in the Federal Medical Assistance Percentage (FMAP) included in the March 18 Families First Coronavirus Response Act doesn’t necessarily trickle down to those facilities in every state.

“The intent of the 6.2% FMAP was to fight the battle against the coronavirus spread,” Eddie Parades, senior vice president of government affairs at StoneGate Senior Living, told Skilled Nursing News in a May 12 interview, citing conversations with “a couple” U.S. senators. 

“But it was awarded to the executive branch of each one of the states, and our understanding is there were not strings attached.”

The government pays covers a specific percentage — the FMAP — of their Medicaid expenses, and when the Families First Coronavirus Response Act was passed, that percentage was increased by 6.2 percentage points. But those funds went directly to each state’s governor, Parades noted.

Essentially, that means governors can choose to use those increased funds as they see best for the Medicaid program, albeit under the federal mandates to document expenditures in a way that ensures a clear audit trail, according to the federal government’s FMAP FAQs, updated on April 13.

Some states have used the funds to increase the Medicaid rates paid to nursing facilitiesothers have not, as multiple executives at real estate investment trusts (REITs) have noted.

The American Health Care Association (AHCA), a trade group representing more than 14,000 skilled nursing and assisted living facilities, has been tracking states where a Medicaid rate increase was approved — albeit not necessarily states that opted to pass on their FMAP boost.

According to the group’s data as of May 15, these included: California, Colorado, Connecticut, Indiana, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Montana, New Hampshire, North Carolina, Oregon, Rhode Island, South Carolina Tennessee, Vermont, Virginia, Washington and Washington D.C.

Notably absent from the list: hotspots in the Northeast, including New York and New Jersey, where the death toll in nursing homes has made national news.

Washington, where the first major outbreak of COVID-19 occurred in a skilled nursing facility in Kirkland, was one of the states to implement an increased Medicaid rate as a result of their boost in FMAP funds.

But Washington nursing homes had to ensure they stayed in touch with the state to secure those dollars, Washington Health Care Association (WHCA) president and CEO Robin Dale told SNN during a May 11 interview.

“The first step was to look at all Medicaid spending; they took that and decided how much of the FMAP funding could be provided to nursing homes,” he said.

The state of Washington identified the degree of savings to the state that could be attributed to the skilled nursing sector for this increased FMAP. 

It then had to determine how it was going to distribute those funds, and the effective date of the increase; the date would determine the amount of the increase, Dale explained.

If the state began distributing those funds to nursing homes retroactive to February 1, the rate add-on would be $29 per day, using the savings generated by the enhanced FMAP.

When the Centers for Medicare & Medicaid Services (CMS) approved that date, that $29 per patient per day was added to the Medicaid rate starting from that day.  Those funds started coming through sometime in March, Dale said, praising for the work the state did in conjunction with providers to make this assistance happen.

“It helped providers pay hazard pay or increase overtime for staff,” he said.  “And any other additional increases, like agency [staffing], which doubled, tripled, and quadrupled magically in March.  Everybody needed help, almost right away, and that $29 was a big help to keeping these providers on their feet through March and into April.”

The methods states have used to implement the increase flat dollar amounts, or a percentage of the Medicaid rate, while some have used temporary emergency Medicaid rate increases, Parades noted.

Several other states, however, have either said “no” to increases or are in the midst of dialogue about how to use those FMAP funds.  For many of AHCA’s skilled nursing providers, they’ve had to press the states to secure Medicaid rate increases, AHCA senior vice president of reimbursement policy Mike Cheek told SNN.

The states that haven’t allocated FMAP funding for nursing homes are trying to navigate their own COVID-19 pressures; they’re focused on the unemployment spike from the COVID-19 fallout, Cheek said, and have been considering whether to use their FMAP increase as economic stimulus or to cover the newly uninsured.

“Those are important questions, of course, and there are merits to the state arguments for that,” he told SNN.  “So it’s a tough balancing act.”

That concern was something Parades encountered in Oklahoma, where StoneGate has 13 SNFs and assisted living centers — specifically, concerns about the increase in Medicaid utilization as more and more people are affected by the economic troubles stemming from the pandemic.

“Statistically, every individual that files unemployment historically has also demanded a $10,000 increase of Medicaid benefits,” he told SNN.  “So you can imagine the massive influx of unemployment claims.  The states are anticipating Medicaid utilization volumes to increase.  They’re worried about not maybe passing through those funds directly to health care providers today; they’re keeping their powder dry for when Medicaid [demand] increases.”

Oklahoma received about $1.25 billion in federal funding stimulus support to be used as Gov. Kevin Stitt sees fit, Parades said.  Providers in the state have met with the Medicaid authority and the governor’s staff; they have indicated an influx for nursing homes is under consideration, but nothing is definite, he told SNN on May 12.

In Texas, which received about $2 billion, leaders are considering a rate package proposal of $335 million from the Texas Health and Human Services Commission (HHSC), the state’s Medicaid authority; of that total, the HHSC would send about $138 million directly to SNFs in temporary emergency relief payments, Parades told SNN on May 12.

This would offset labor and personal protective equipment (PPE) costs; as of May 12, the proposal was still working through the legislative budget board.

StoneGate has 21 SNFs and assisted living facilities in the Lone Star State.

“The challenge is we are about 10 weeks into this, and our cash burn is unsustainable,” Parades told SNN.  “We’re very appreciative of the actions, but it still hasn’t happened.”

In Alabama, Stephanie McGee Azar, the commissioner of the Alabama Medicaid Agency, used the increased FMAP funds to adjust the nursing home daily rate upward by $20 per patient per day, Alabama Nursing Home Association president and CEO Brandon Farmer told SNN on May 15.

The order technically runs from March 1 through the duration of the national emergency; in practice, this increase will definitely be in place through June 30, he said.

In Alabama, nursing homes that do not use the entirety of the $20 increase will see that reflected in their new rates.  The nursing homes have to file cost reports on June 30, and the next rate set by the state and the Medicaid office will be based off those reports, to take effect on January 1, 2021.

“If, at the time which we file cost reports, a building or provider has not spent that additional $20, then in the rate-setting for the next cycle starting January 1, their rate would be adjusted by the amount that was not spent,” he explained.

Out of the 234 SNFs in Alabama, 127 are reporting COVID-19 cases, he told SNN on May 15.  Many facilities are using the increased rate to buy additional PPE and prepare for elevated staffing needs, and Farmer noted that while the state appears to be plateauing overall, “it’s not slowing down, at least not in the SNFs.”

“This interim rate adjustment, to us, is certainly much needed and very much appreciated, and would be spent and is being spent to help combat this crisis,” he said.  “Moving forward, certainly, it would not be enough to address the entirety of the needs of all the state’s facilities, but it is a manner that got us funds in an expedited capacity.”