State Releases Two Final Medicaid Policies

On August 29, the Michigan Department of Health and Human Services (MDDHS) released two final Medicaid policies that impact nursing facilities, MMP 25-34-LTC and MMP 25-35-LTC.

Policy 1: Non-Available Bed Plans

MMP 25-35 finalized the department’s proposed policy on non-available bed plans (NABP) for the period covering 10/1/25-9/30/26. HCAM successfully advocated for changes to the proposed policy. The final policy includes two substantive changes:

• A portion of common area square footage within a room containing both available and non-available beds will be designated as non-Medicaid reimbursable for plant costs only. The original plan impacted both plant and variable costs. 
• Starting October 1, 2025, providers with NABP’s in place on September 30, 2025, may submit new NABP requests that mirror the plans that ended September 30 or they may submit changes. The original plan did not allow changes to new NABP’s for those providers with existing plans. 

Policy Specifics

Qualifying Criteria: There are no discrete area or contiguous physical arrangement requirements for the designation of a non-available bed. During this interim policy period, providers may designate as non-available beds individual beds within a room that are not being used for resident care. A portion of the common physical space within a room containing both non-available beds and available beds will be designated as a non-available bed area for cost report statistical purposes.

Cost Reporting/Treatment of Square Footage: The plant costs attributed to the area(s) designated as non-available and the related capital asset cost are not Medicaid reimbursable costs. The non-available rooms and bed numbers must be reported as a non-available beds cost center on the provider’s Medicaid cost report. This includes entire rooms that are part of the NABP and rooms that contain both non-available and available beds.

NABPs that have rooms containing both non-available and available beds will have their square footage calculated to take plant costs into reimbursement consideration. The calculation will be based on the ratio of beds available (Medicaid-reimbursable) to beds non-available (not Medicaid-reimbursable).

Timeline of an Approved NABP: New NABPs during the interim policy will have a life of no more than 12 months (with an end date of September 30, 2026). Facilities with existing NABPs as of September 30, 2025, that wish to “continue” their NABP with a start date of October 1, 2025, must contact the MDHHS Reimbursement and Rate Setting Section (RARSS) no later than 60 days after the effective date of this policy, which is November 30. Facilities with existing NABPs that do not contact RARSS by November 30 will have their plans end-dated to September 30, 2025. New NABP requests may mirror the plans that ended on September 30, 2025, or they may be submitted with changes.

Facilities without an existing NABP may apply for an NABP during the interim with any plan ending September 30, 2026. Providers will have 60 calendar days from the date that the provider removes the bed from service to submit the written NABP request. If the request is not received within 60 days from the date of bed removal, then the date of the plan will begin the first day of the following month.

The 24-month ineligibility period that follows the expiration of the previously approved NABP, during which providers cannot submit a new NABP, will be waived until September 30, 2026. Facilities with NABPs end-dated September 30, 2025, are eligible to submit a new NABP following the expiration of the previously approved plan

Amending an NABP: NABP amendments will not be allowed under this interim policy.

Returning Beds to Service: In special circumstances, such as a sudden increase in demand due to closure of a nearby facility, non-available beds may be returned to service before the end of the approved NABP with prior RARSS approval.

Questions or concerns? Email HCAM’s Mike Batts.

Policy 2: Nursing Facility Ventilator-Dependent Care Unit (VDCU) Enrollment

MMP 25-34 finalized the department’s proposed policy on new Medicaid VDCUs, which adds a 6-quarter survey look back for any new VDCU Medicaid enrollment. MDHHS stated that this policy was implemented after the recent HCAM-led change to remove survey look back periods for Medicare Only Beds seeking Medicaid certification that affected the VDCU Medicaid certification process. 

HCAM continues to advocate for VDCU care and is currently working with MDHHS and the legislature on a proposal to improve VDCU reimbursement methodology. 

MMP 25-34-LTC has complete policy specifics on the VDCU enrollment policy.