Albany Times Union

Nursing homes sue state health department

Lawsuit claims the agency “illegally froze” reimbursem­ent

ALBANY — More than 200 nursing homes across New York filed a lawsuit against the state’s Department of Health recently challengin­g a change to a reimbursem­ent formula for Medicaid they said has improperly cost them funding.

The lawsuit, which was filed in the state Supreme Court in Albany, asserts that New York reimburses nursing homes for Medicaid patients based on a formula that considers the intensity of care needed for individual­s. The petitioner­s have accused the state agency of “illegally freezing” a formula used for reimbursem­ent rate calculatio­ns for New York nursing homes.

The “case-mix adjustment,” as the reimbursem­ent formula is known, is calculated for facilities every six months and is used to determine how much the facilities receive in reimbursem­ent from New York for the prior months.

“The purpose of the case-mix adjustment is to encourage facilities to admit higher-care patients so that those patients are not backed up in hospitals when they can be cared for in a less expensive nursing home setting,” the lawsuits says.

In late March, the lawsuit says, the Health Department published a notice in the state Register that the case-mix adjustment would not be changed from the previous rates, last calculated in July 2023. The change in policy was to become effective on April 1.

Nursing homes involved in the lawsuit, however, contend that the time period from Jan. 1 to March 31, should still receive adjusted Medicaid reimbursem­ent based on the intensity of patients facilities cared for, given the changed policy was not effective until April 1; previously, the formula was calculated twice a year in January and July.

Stephen Hanse, president and chief executive officer of the New York State Health Facilities Associatio­n, said that the requested relief that those three months be subject to the case-mix adjustment would be a “budget neutral” action. Some nursing homes would be reimbursed more than they had been in July due to taking on patients with more intense care needs, while other facilities would be reimbursed less than their July level due to having patients with less intense care needs.