Good News: MDHHS Agrees to Two Significant Adjustments to Help Providers
Yesterday we shared a member update announcing that the Michigan Department of Health and Human Services (MDHHS) has agreed to offer Quality Assurance Assessment Program (QAAP) payment plans and also expedite initial settlements. Today, MDHHS issued a memo to that effect. Read on for details.
Provider Tax Payment Plans
Earlier this year, in an effort to address nursing facilities’ cash flow issues, MDHHS deferred the payments for the first two quarters of the 2023 state fiscal year (October – December 2022 and January – March 2023). MDHHS sent bills for these payments in March. The first quarter payments are due March 25, and second quarter payments are due in mid-April.
Understanding that these bills are substantial, HCAM advocated with the department to allow more time for providers to make their payments. We’re pleased to report that MDHHS agreed and is committed to working with providers on payment plans. To request a payment plan, please email MDHHS’s Mary McGrath.
HCAM is thankful that the department has agreed to work through the specifics of each provider’s circumstances in consideration of a payment plan. The department reports that, as long as payment plans are in place and signed by April 9, 2023, no penalties will be charged on either Quarter 1 or Quarter 2 invoices.
Initial Settlements for Fiscal Year 2022 Cost Reports
We are also happy to report that MDHHS agreed to an HCAM request to distribute initial settlements for providers’ fiscal year 2022 cost reports. Initial settlements will direct the funding that is due to providers much sooner than funds would be available through the normal cost report audit and settlement process.
MDHHS is offering a modified initial settlement for facilities that file their December 31, 2022, cost report by April 15, 2023.
Early Filing:
- For any facility with a December 31, 2022, year-end, MDHHS will offer a modified initial settlement if the facility files its December 31, 2022, cost report by April 15, 2023. Cost reports filed for 2022 fiscal years ending prior to December 31, 2022, will also qualify for the modified initial settlement if a provider chooses to request it.
- Any facility interested in this modified initial settlement proposal will still need to formally request MDHHS to complete a modified initial settlement on company letterhead (the normal process).
- This modified initial settlement will use the accepted cost report data but will use a previously established variable cost limits that will be multiplied/increased by a percentage consistent with the recent year SPA rate increases (i.e., 2.5 percent increase for FY22 and 4.55 percent for FY23). The variable cost limit will NOT be based on any filed costs up to this point as all cost reports will not be filed until May 31, 2023.
- MDHHS reports that, when a cost report is accepted, the department anticipates it will take 2 to 3 weeks for processing. The department anticipates that all settlements will complete by June 30.
Normal Filing:
- For any facility with a December 31, 2022, year-end, that elects to file on the normal due date of May 31, 2023, the normal initial settlement process will be followed. Any cost report submissions after April 15, 2023, will not qualify for the early filing/modified initial settlement proposal above.
- Any facility interested in an initial settlement will need to formally request MDHHS to complete an initial settlement on company letterhead.
- The normal initial settlement will use the accepted filed cost reports and newly established “Variable Cost Limits” to compute a normal initial settlement. These normal initial settlements would be completed in September – October 2023.
If it’s determined that the initial settlement is an underpayment amount to the nursing facility, additional payment will be made to the provider for not less than 70% and not more than 80% based on existing Medicaid policy.
Please direct any questions related to cost report filing or early filing to [email protected].
It is our hope that this funding solution — coupled with the additional $63 million in funding (2% rate increase) that was allocated to nursing facilities when Governor Whitmer signed House Bill 4016 on March 8 — will bring much needed relief to providers. HCAM thanks all of our members for their assistance in our advocacy efforts!