An Update to Ohio’s Plan to Distribute $350 Million to the State’s Long-Term Care Providers

Date January 18, 2022
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Ohio has not yet distributed any of the funds for long-term facilities and services that its General Assembly appropriated in House Bill 169. As of Monday, January 18, the Ohio Department of Medicaid had not filed for the necessary federal approvals with the Centers for Medicare and Medicaid Services, attributing the holdup to a change in the methodology for distributing the $300 million designated for skilled nursing facilities, which was to be based on numbers of certified beds. The revised formula has 75 percent of the payout based on Medicaid days from 2020 cost reports. The remaining 25 percent is to be distributed according to “quality points” from the July 1, 2021, rate-setting, without excluding facilities ranking lower than the 25th percentile.

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Ohio Providing $350-Plus Million to Address LTC Direct-Care Workforce Shortages

Date January 17, 2022
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The Ohio Senate and House have passed legislation to provide in excess of $350 million for the State’s long-term care (LTC) facilities and services. The bill, sponsored by State Reps. Al Cutrona (R) and D.J. Swearingen (R), restricts payments to pay, bonuses, and incentives to recruit and retain the direct-care workforce. The monies cannot be used to pay other operating costs and expenses.

In addition to $300 million for nursing homes, the bill sets aside $23 million for hospice services and $33 million for assisted living facilities, which have also experienced staff challenges during the COVID-19 pandemic. The money is derived from federal funds allocated to Ohio, and according to the legislation, must be distributed by the end of 2022. But the State has not yet announced when funds will be distributed, and apparently is awaiting federal approval.

The Ohio Department of Medicaid (ODM) will be responsible for distributing the money. ODM plans to allocate the money based on each skilled nursing facility’s (SNF) certified bed count as of December 31, 2021. Current expectations are that $3,500 will be allocated for each “skilled” bed. ODM has confirmed that $500 will be allocated for each Assisted Living bed, matching the request of the Ohio Health Care Association.

According to the U.S. Bureau of Labor Statistics, about 420,000 skilled employees have left the profession over the past two years. Ohio operators have been offering incentives for sign-on bonuses and educational costs, but the efforts have failed to make a dent in employment shortfalls. It appears the State is hoping that money will convince the workers to stay, maybe even come back. But studies show that especially younger workers are more concerned about COVID-related health issues and free time than bonuses.

Can Ohio LTC facilities use the money for costs like maintenance, dietary and janitorial staff? Not according to the letter of the law, which limits payments to those directly caring for patients. Facilities could benefit by using the funds to address a variety of expenses. With elective surgeries reduced and a general unease of the public, the number of private therapy patients, who generate higher revenues, has fallen, as has the number of Medicare patients as the concentration of Medicaid patients grows, driving down per patient revenues and creating losses for providers. The State would be wise to allow long-term care facilities to use the funds to pay a wider range of expenses so they can remain open and providing care.

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Reporting Portal Open for Period 2 Provider Relief Fund Payments

Date January 17, 2022
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Healthcare practices that received Provider Relief Fund payments in excess of $10,000 in aggregate between July 1, 2020, and December 31, 2020, are required to report on how they spent those dollars by March 31 of this year. The Health Resources and Service Administration’s (HRSA) has opened the reporting portal for funds received during that timeframe, defined as Period 2. The moneys were to be used by December 31, 2021. Filers who were required to report in Phase 1 will be required to provide information on the related expenditures for Q3 and Q4 of 2021. (Filers who did not need to file in period one will need to report on information related to each quarter from 2019 to 2021)

Over the past two years, the HRSA has distributed funds to healthcare providers in four phases. Initially, in Phase 1, payments consisted of 2 percent of providers’ 2019 Medicare reimbursement amounts. Phase 2 welcomed additional practices, like assisted living facilities and others that don’t accept Medicare, and smaller practices, like dentists and chiropractors. The intent was to supplant revenue lost to COVID in 2020, to make these practices whole based on their 2019 revenues. A Phase 3 round extended additional payments to more providers, like rural communities and nursing homes, and Phase 4 distributions, which began in October 2021, allowed virtually any healthcare related provider to apply in an attempt to even the playing field throughout the industry.

The payments are intended to cover losses related to the pandemic, to prevent, prepare for and recover from COVID-related losses. Providers can spend the money on indirect as well as direct costs necessitated by the pandemic. For example, a practice paying $10,000 a month for rent in 2019 and serving 10,000 patients per month, but only 8,000 patients per month in 2020, could report a $2,000 per month indirect COVID-related expense. While all providers receiving payments of more than $10,000 in period 2 must report, the reporting requirements are enhanced as the aggregate payments increase, growing substantially more detailed at the $500,000 then $750,000 amounts.

Indirect costs in particular can be difficult to identify and calculate, especially for many small and mid-size providers new to the relief programs with Phase 2. As such, HBK Healthcare Solutions has been working with providers to help them develop complete and accurate reporting. As well, the HRSA has posted a Provider Relief Fund Lost Revenues Guide, which details three options for reporting revenue. Included is clarification that quarters with positive changes in revenues will be treated as zero—that is, the increase in revenue in a single quarter compared to the base period will not impact the calculation for that quarter.

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