Nursing Facility Medicaid Billing Rates

As a reminder, it is important to regularly review and update your Nursing Facility Medicaid billing rates. For Medicaid, facilities should bill their usual and customary charge. The usual and customary charge is the rate that a facility would bill for a private pay stay and is based on the cost of care to provide that service. Facilities should not bill the Medicaid rate stated on their current rate letters. 

Keep this in mind: Medicaid cannot pay more for a stay than what was billed. Your billed amount becomes your charge to the Medicaid program and will be compared to the final rate after the audit of the Medicaid cost report for that fiscal year.

This is of particular importance when Medicaid payments are retroactively cost settled, especially during an inflationary period. Medicaid will cost settle fiscal years 2022 and 2023 from the Medicaid cost reports based on a special rate methodology allowed to reflect costs during the pandemic. If a facility charges less than the amount due to them in a period covered by a cost settlement process, that facility will receive the billed amount, not the cost settled amount due to them. The facility will be allowed to recoup this reimbursement in the next two fiscal reporting years.

This policy is in the Michigan Medicaid Provider Manual under the Nursing Facility chapter, Cost Reporting & Reimbursement Appendix, Section 10 Rate Determination, page a91. It states the following:

Nursing facility providers other than Class IV (ICF/MR) are reimbursed under a methodology that pays the lower of the customary charge to the general public or a prospective payment rate determined by Medicaid.

Questions? Email [email protected].