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Long Term Care Reimbursement

The Long Term Care (LTC) Reimbursement Unit conducts the annual study to develop the Medi-Cal rates for a variety of long-term care providers. This study serves as the basis for Medi-Cal reimbursements of Nursing Facilities including Nursing Facility - Level A (NF-A), Distinct Part Skilled Nursing Facilities of General Acute Care Hospitals (DP/NF-Bs), Distinct Part Adult Subacute Units for General Acute Care Hospitals (DP/SA), Hospice Care, Rural Swing Beds, Acute and Transitional Inpatient Care Administrative Days (Administrative Days Level 1) and Intermediate Care Facilities for the Developmentally Disabled
(ICF-DD) (including ICF/DD-Habilitative and ICF/DD-Nursing).  This unit also conducts the necessary research to develop new or revised reimbursement methodologies necessary to meet changing policy or program needs.

The Medi-Cal LTC reimbursement rates are established under the authority of Title XIX of the federal Social Security Act.  The specific methodology is described in the State Plan, a document prepared by the Department staff which requires approval by the Centers for Medicare and Medicaid Services (CMS). 

Latest News 

Intermediate Care Facilities for the Developmentally Disabled (including Habilitative and Nursing) Providers

Update - August 12, 2016

The Centers for Medicare and Medicaid Services (CMS) approved a new reimbursement methodology for ICF/DD, ICF/DD-H, and ICF/DD-N effective August 1, 2016, pursuant to State Plan Amendment 16-012.  The new methodology authorizes the Department of Health Care Services (DHCS) to reimburse facilities at the 2008-09 65th percentile established for the facility’s respective peer group increased by 3.7 percent, through the enabling legislation of Assembly Bill (AB) x21, and Welfare and Institutions Code Section 14105.075.  The reimbursement rate will also include the projected cost of complying with any new State or federal mandates to the extent applicable to the reimbursement methodology associated with the type of facility.
 
The rates effective August 1, 2016, will include the additional facility-specific add-on related to the ACA Employer Shared Responsibility Mandate, and the ACA IRS Employer Reporting Mandate, only for the facilities that submitted a certification form.
 

Two New Facility Specific Add-Ons for LTC Reimbursement  

 
The following article initially published with a form submission deadline of January 15, 2016.  The form submission deadline has been extended until February 29, 2016. 
 
Effective for dates of service on or after August 1, 2015, the following two add-ons are available for Long Term Care (LTC) facility specific reimbursement for Applicable Large Employers (ALE) to recover costs due to the Patient Protection and Affordable Care Act (ACA) Employer Shared Responsibility and Internal Revenue Service (IRS) employer reporting mandates. The deadline for submitting requests for the two  add-ons listed below is January 15, 2016.

Reimbursement for Additional Cost(s) Due to ACA Employer Shared Responsibility Mandate

Effective in the 2015 – 2016 Rate Year, the Department of Health Care Services (DHCS) is providing facility specific reimbursement by way of an add-on to the Medi-Cal reimbursement rate for the additional cost of health care coverage solely due to Employer Shared Responsibility requirements in the ACA embodied in Section 4980H of the Internal Revenue Code (IRC). The add-on will apply to the following facilities:

  • Free-Standing Skilled Nursing Facilities Level B (NF-B)
  • Free-Standing Adult Subacute
  • Nursing Facilities Level A (NF-A)
  • Distinct-Part Nursing Facilities Level B (DP/NF-B)
  • Rural Swing Beds
  • Distinct-Part Adult Subacute
  • Distinct-Part Pediatric Subacute
  • Free-Standing Pediatric Subacute
  • Intermediate Care Facilities for the Developmentally Disabled (ICF/DD)
  • Intermediate Care Facilities for the Developmentally Disabled/Habilitative (ICF/DD-H)
  • Intermediate Care Facilities for the Developmentally Disabled/Nursing (ICF/DD-N)

 

To qualify to receive an add-on, providers need to submit a Certification Form verifying that the employer is an ALE as defined by IRC Section 4980H (and its implementing regulations and guidance) and has incurred additional health care coverage costs solely as a result of the ACA Employer Shared Responsibility provision. This is a two year add-on to the rate until the ACA mandated health care coverage costs are in the facility’s cost report. 

 

Providers may submit the Certification Form electronically to supp1629@dhcs.ca.gov with the subject line “ACA Certification Form” along with their facility’s OSHPD number (for example, “ACA Certification Form 206xxxxxx”). Providers who are not able to submit electronically can mail a signed copy of the certification form to: 

Department of Health Care Services

Fee-For-Service Rates Development Division

Long Term Care Section

ACA Cert Form

P.O. Box 997417, Ste. 71.3052, MS 4600

Sacramento, CA  95899-7417

This information must be received by DHCS no later than January 15, 2016. For assistance, providers can contact the Long Term Care System Development Unit at supp1629@dhcs.ca.gov.

Reimbursement for Additional Cost(s) Due to IRS Employer Reporting Mandate

Effective in the 2015 – 2016 Rate Year, DHCS will be providing facility specific reimbursement by way of an add-on to their Medi-Cal reimbursement rate for the additional cost of complying with the reporting requirements imposed by IRC Section 6056 to report employee health coverage information to the IRS through completion of Forms 1094-C and 1905-C. The add-on will apply to the following facilities:

  • Intermediate Care Facilities for the Developmentally Disabled/Habilitative (ICF/DD-H)
  • Intermediate Care Facilities for the Developmentally Disabled/Nursing (ICF/DD-N)

 

Only the ICF/DD-H or ICF/DD-N providers that meet the ALE definition need to submit a Certification Form because the employer reporting add-on is already included in the 2015 - 2016 reimbursement rate for the following facilities:

  • Free-Standing Skilled Nursing Facilities Level B (NF-B)
  • Free-Standing Adult Subacute
  • Nursing Facilities Level A (NF-A)
  • Distinct-Part Nursing Facilities Level B (DP/NF-B)
  • Rural Swing Beds
  • Distinct-Part Adult Subacute
  • Distinct-Part Pediatric Subacute
  • Free-Standing Pediatric Subacute
  • Intermediate Care Facilities for the Developmentally Disabled (ICF/DD)

 

To qualify to receive an add-on, ICF/DD-H or ICF/DD-N providers need to submit a Certification Form verifying that the employer is an ALE as defined by IRC Section 4980H (and its implementing regulations and guidance) and has incurred additional health care coverage costs as a result of the ACA IRS employer reporting mandate.

 

Providers may submit this form electronically to LTCReimbursement@dhcs.ca.gov, with the ICF/DD-H or ICF/DD-N National Provider Identifier (NPI), the facility’s nine digit ZIP code, and “Employee Reporting Cert.” in the email subject line. The form may also be submitted by fax to 1-916-449-5337. This information must be received by DHCS no later than January 15, 2016. For additional information, providers can email LTCReimbursement@dhcs.ca.gov. 

Distinct Part Nursing Facilities - Level B

On December 20, 2013, the Department received approval of State Plan Amendment (SPA) 13-034 from CMS, which amends Attachment 4.19-D of the California State Plan. This SPA exempts Distinct Part Nursing Facilities - Level B (DP/NF-B) from the 10 percent payment reduction at the reimbursement rates established in 2008-2009 required by Assembly Bill (AB) 97. Exemptions to the payment reduction and rate freeze required by AB 97 are retroactive to the following dates:
  • On or after September 1, 2013, DP/NF-Bs designated as rural or frontier as determined by the Office of Statewide Health Planning and Development
  • On or after October 1, 2013, every DP/NF-B, in addition to the rural and frontier DP/NF-Bs indicated above

 

On June 25, 2013, the United States Court of Appeals for the Ninth Circuit vacated the injunctions to Assembly Bill 97 (AB 97, Statutes of 2011). The Department will implement AB 97 10 percent payment reduction and rate freeze retroactive to June 1, 2011.

Providers Impacted by AB 97

The following classes of providers are impacted by the rate freeze and the 10 percent payment reduction:

  • Nursing Facilities - Level A (NF-A)
     

The following are impacted by the rate freeze and a new reimbursement rate methodology, beginning with the 2013/14 rate year, and effective on May 27, 2014:

  • Intermediate Care Facilities for the Developmentally Disabled (ICF/DD), ICF/DD-Habilitative and ICF/DD-Nursing.
     

The following are not impacted by AB 97, rates are unreduced and unfrozen:

  • Distinct Part Adult Subacute Care
  • Distinct Part Nursing Facilities - Level B (DP/NF-B) effective October 1, 2013, and DP/NF-B Rural and Frontier effective September 1, 2013.  Previously impacted effective June 1, 2011.
  • Rural Swing Bed rates for Hospitals with a DP/NF-B

 

The following are impacted by the rate freeze ONLY:

  • Rural Swing Bed rates for Hospitals without a DP/NF-B

Note

  • Adult Day Health Care has moved to the Community Based Adult Services (CBAS) program.
  • Beginning with the 2013.14 rate year, the Freestanding and Distinct Part Pediatric Subacute facility rates are established by the Long Term Care Systems Development Unit, Fee For Services Rates Development Division.  For information and rates, see the LTC AB1629 page.

Helpful Links

LTC AB1629

Facilities' Rates and Policy Information

Nursing Facility - Level A (NF-A)
Distinct PART Nursing Facility - Level B (DP/NF-B)
Administrative Day Rate Level 1
Distinct PART Adult Facilities (Adult Subacute)
Intermediate Care Facilities (Developmentally Disabled, Habilitative, and Nursing) ICF/DD
Rural Swing Bed
Hospice Care
Last modified on: 8/12/2016 4:25 PM