Previous fiscal impact responses prepared for similar proposals reflected substantial costs because of the premise that the new beds would be filled with Medicaid recipients. The number of Medicaid recipients residing in nursing facilities has remained fairly constant since 1992, while at the same time the number of available beds has been increasing. Therefore, for the section of this proposal that addresses the phase-out of the certificate of need process, they recognize a fiscal impact but not to the extent in previous CON fiscal impact responses. The DMS no longer believes that an increase in available beds will increase the number Medicaid is paying for, and in fact the last five years historical trends support this position. The proposed extension will generate a cost avoidance to the Medicaid program.
Current regulation allows for a rate adjustment because of the addition of beds.
Newly constructed facilities have a higher per diem than the average Medicaid per diem. New facilities entering the Medicaid program receive an interim rate for the first two years of operation then a rate is set based on their cost report. This rate is retroactive to the first day of their second fiscal year of operation. The DMS further assumes the number of facilities adding new beds would double without the CON requirements. The DMS has received 3 requests for rate adjustments due to the addition of beds this fiscal year.