On Wednesday, February 23, 2011, Association members and staff met with representatives from the Department of Human Services (DHS) to discuss the future of certified boarding care homes (known as NF IIs), especially in light of Governor Dayton’s budget page targeting “low needs case mix.” The meeting with Assistant Commissioner Loren Colman and his staff was originally set up for the purpose of discussing the future of NFIIs and how they can continue to meet the needs of their clients who have mental health needs as well as medical needs. Members were interested in finding out how policy directions from this administration may impact them in the future, and how they may be able to access additional funds for the mental health services they are providing or could provide. The Governor’s budget page—which saves $17.4 million over the biennium by reducing rates for a specific case mix category by 25%—became the new focus of the meeting.

While the budget page (click here and click on “Low Needs Case Mix 25% Reduction” if you haven’t read it yet) clearly applies to all nursing facilities in the state who serve individuals in the PA1 case mix classification, the budget page delineated the NFII facilities. Here are a few of the questions we asked at this meeting and the responses from DHS staff:

1. Q: What is the timeframe for determining PA1 numbers and effective date of the reduction?
A: The bill language is drafted to take effect at the start of the fiscal year, which is July 1, 2011. This means whichever residents are in the PA1 category on July 1 and forward would have a reduction in their rates of 24%. This is important to note for MDS coding and admissions, should this proposal become law.

2. Q: What happens when residents move between categories, i.e., when a facility stabilizes a BA1 resident they move to PA1 and vice versa depending on the cycle of their mental illness?
A: This wasn’t really contemplated by DHS staff, as they had assumed most residents with mental health needs and behavioral issues would NOT be in the PA1 case mix category, but rather, would be in the BA1 category. There was some discussion about changes that may need to be made to the bill language to respond to this rather common phenomenon.

3. Q: What is the interaction between RUGS IV, which will be in transition at the beginning of this year, and this PA1 payment reduction proposal?
A: Again, it appears the interaction of the new case mix system and this proposal were not thoroughly vetted. Even though a PA1 would remain a PA1 under RUGS IV, there is a distribution issue as well as a shifting between case mix categories issue.

4. Q: Discharge potential: How can the facilities discharge their current PA1 residents without a location to move them into? Do you plan to change the resident relocation and discharge statutes to accommodate this proposal?
A: There was no response to this question. The budget does not include funding for the placements that these 4000 residents would need to move into. It will be difficult to discharge these residents for non-payment since they would be paying a portion of their rates. In addition, when discharging residents for nonpayment, it is important to have a placement location on the discharge notice.

5. Q: This proposal impacts many facilities in addition to the NFIIs—many facilities in very rural communities would have rates reduced for this population, with limited alternatives available in that home community. Has DHS analyzed the availability of service options in these rural communities and the costs of these options?
A: No. This was not considered during the development of this proposal. We noted some very specific examples of where the alternatives to NFII care will be MUCH more expensive—whether hospital stays or waivered services or supportive housing with the package of services needed.

6. Q: The budget page references the Level of Care criteria, but the numbers don’t match—the level of care criteria would have impacted 800 nursing facility residents and this proposal impacts over 4,000. How can you reconcile these numbers?
A: The new Level of Care criteria, which is now slated to kick in later than originally planned due to federal maintenance of effort requirements (2014), included language that protected current residents, and it only applied to new admissions.

The remaining portion of the meeting was a discussion on next steps. It was clear that DHS staff did not have a good indication of the entire profile of residents who fall under this case mix category, so one of the next steps is to gather this information from members. We will be sending out a survey in the near future with a few key questions to aid us in this advocacy. Second, this will be one of the reductions in the Governor’s budget that we will be adamantly opposing. We will be using all of our advocacy tools—including details to the Governor and Commissioner of DHS that delineate the implications of these reductions—and requesting that the improved budget forecast to be announced next week be used to “buy back” these cuts.

Patti Cullen, CAE
952.851.2487
pcullen@careproviders.org

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