Final Action for Setting Payment Rates for Long Term Care Facility Services (Excluding State-Owned Nursing Facilities)

The South Carolina Department of Health and Human Services (SCDHHS), pursuant to the requirements of Section 1902(a)(13)(A) of the Social Security Act, gives notice of the following actions regarding its methods and standards for setting payment rates for long-term care facility services (excluding state-owned nursing facilities) under the South Carolina Medicaid State Plan (State Plan) under Title XIX of the Social Security Act Medical Assistance Program (Medicaid).

Effective for services provided on or after Oct. 1, 2020, SCDHHS will amend the South Carolina Title XIX reimbursement methodology for long term care by:

1. Providing payments to nursing facilities based on the most recent cost report data available (i.e., fiscal year-end (FYE) Sept. 30, 2019).
2. Updating the cost center standards using the most recent cost report data available (i.e. FYE Sept. 30, 2019) as well as determining the standards at 110% of the mean to account for coronavirus disease 2019 (COVID-19) occupancy issues.
3. Applying a 2.50% inflation factor in the calculation of the Oct. 1, 2020, payment rates.
4. Increasing the square footage allowance used for capital cost reimbursement purposes from $215.55 to $222.96 in accordance with the annual increase reflected in the RSMeans Construction Cost Data publication.
5. Providing for a facility-specific COVID-19 add-on to only account for COVID-19 employee testing based upon federal guidelines. Effective for services incurred on and after Jan. 1, 2021, the COVID-19 add-on will be eliminated from the Medicaid reimbursement rate. SCDHHS will then contract directly with an outside vendor to perform the employee testing and thus reimburse the vendor directly for Medicaid’s share of the cost of employee testing.
6. Adjusting the total patient days used in the computation of the Oct. 1, 2020, nursing facility rates in order to consider the changes in nursing facility occupancy during the COVID-19 pandemic and the use of a minimum occupancy rate of 87.50%.
7. Determining the cost of capital per diem as well as the non-emergency medical transportation (NEMT) per diem using the greater of actual FYE Sept. 30, 2019, total patient days subject to a minimum occupancy rate of 90.00%. 
8. Reimbursing impacted nursing facilities for Medicaid’s share of Hurricane Dorian-related evacuation costs due to the mandatory evacuation issued by Governor McMaster based upon FYE Sept. 30, 2019, Medicaid utilization rates.

SCDHHS is implementing the above actions in order to address the impact of the COVID-19 pandemic on prospective nursing facility payment rates and toprovide payment to impacted nursing facilities for Medicaid’s portion of costs related to the governor’s mandatory evacuation issued as a result of Hurricane Dorian.

As a result of the actions relating to the Medicaid reimbursement methodology changes for nursing facilities effective for services provided on or after Oct. 1, 2020, the weighted average rate is projected to be $212.74. However, due to the elimination of the COVID-19 add-on for services provided on or after Jan. 1, 2021, the weighted average rate is projected to be $202.00. The weighted average Oct. 1, 2019, rate was $192.96. This represents a weighted average per diem increase of $19.78 per Medicaid patient day, or a 10.25% increase in the Oct. 1, 2020, payment rates. For Jan. 1, 2021, payment rates, this represents a weighted average per diem increase of $9.04 per Medicaid patient day, or a 4.69% increase.

SCDHHS projects that based upon the above actions, annual aggregate expenditures will increase by approximately $47.0 million total dollars including Medicaid days paid while the recipient is under the hospice benefit.

Copies of this notice are available at each SCDHHS Healthy Connections Medicaid office and at www.scdhhs.govfor public review. Additional information concerning the above actions is available upon request at the address cited below.

Any written comments submitted may be reviewed by the public at the SCDHHS, Division of Long Term Care Reimbursements, Room 1219, 1801 Main Street, Columbia, S.C., Monday through Friday between 9 a.m.-5 p.m.