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Indiana Family and Social Services AdministrationOffice of
Medicaid Policy and Planning
Division of Aging
Medicaid Home and Community-Based Services Rate Methodology
Project
Assisted Living Services
June 28, 2019
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Division of Aging
Introductions
• Sarah Renner, Division of Aging• Jesse Wyatt, Division of
Aging• Kathleen Leonard, Office of Medicaid Policy and Planning•
Christine Mytelka, Milliman
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Division of Aging
Agenda• Overview• Proposed Rate Methodologies• Proposed Rate
Calculations • Estimated Rate Impact and Benchmarking• Next
Steps
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Division of Aging
OverviewFSSA Project Goals
• Alignment and Transparency - bring continuity and alignment
across the rate methodologies and rates in each program, providing
a consistent framework
• Sustainability - facilitate adequate participant access to
services, as required by CMS and be sustainable under the FSSA
budget and operations
• Promotion of Person-Centeredness and Value-Based Purchasing
-striving to align provider and participant incentives to achieve
access to person-centered services, encourage appropriate
utilization, and drive healthy outcomes for all HCBS program
participants
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Division of Aging
OverviewHCBS Rate Methodology Estimated Project Timelines*
Projects include rate setting calculations informed by the rate
methodology development process
Program Calendar Year 2019 Calendar Year 2020J F M A M J J A S O
N D J F M A M J J A S O N D
Division of Aging
Division of MentalHealth and Addiction
Division of Disability and Rehabilitative Services
Rate Methodology Development
Note: will follow a separate waiver redesign project currently
being conducted;CMS approval period TBD and will be coordinated
with the redesign project
Comment Period and State Approval
CMS Approval
Rate Methodology Development Comment Period and State
ApprovalCMS
Approval
Rate Methodology Development Comment Period and State
Approval
* Final rate methodologies subject to approval from the State
Budget Agency and presentation to the State Budget Committee.
Preliminary project timelines may be impacted by the CMS and State
approval process.
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- Division of Aging Stakeholder Meeting
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Division of Aging
Division of AgingProposed Rate Methodologies
The proposed rate methodologies for the Division of Aging are as
follows:
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Traditional Cost Model Build-up Rate Composite Negotiated/Market
Rates
Methodology Basis
• Proposed rates based on a labor cost assumption (wage and
benefits), adjusted for administration and program support
• Includes basic fee schedule, tiered and packaged rates
• Based on composite of rates for Assisted Living service
components to reflect the value for the package of services
• Based on market prices (up to an annual or lifetime limit) or
commercial benchmarks
CoveredServices
• Adult Day Service• Adult Family Care• Attendant Care• Care
Management• Healthcare
Coordination
• Home Modifications Assessment
• Homemaker• Respite• Structured Family Care• Non-Medical
Transportation
• Assisted Living • Community Transition• Emergency Response•
Home Delivered Meals• Home Modifications • Nutritional
Supplements
• Pest Control• Specialized
Medical Equipment
• Vehicle Modifications
Note: Rate changes are not proposed at this time for the
following TBI-only services, most of which are primarily provided
under DDRS’ waiver: Residential Habilitation, Structured Day
Program, and Supported Employment.Behavior Management (TBI-only)
will be updated to match the DDRS rate.
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Division of Aging
• Based on feedback from Assisted Living providers, the Division
is proposing an alternative approach to the traditional cost
build-up model that focuses on the value of Assisted Living
services
• Ohio and California Medicaid use a “rate composite” approach
for Assisted Living based on Medicaid rates for a combination of
services comparable to Assisted Living – Ohio: Based on the average
usage of personal care, homemaker, and non-medical
transportation services for a population subset, plus Bureau of
Labor Statistics (BLS) data for registered nurses
– California: Based on one of hour of the Homemaker, Home Health
Aide, and Personal care rates
• The Division is proposing an OH/CA-style methodology for
Assisted Living based on a composite of rates for Assisted Living
service components
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Division of Aging Proposed Rate MethodologiesAssisted Living
Rate Composite Approach
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Division of Aging
• Consistent with the Division’s goals for person-centeredness
and to address bed hold issues, the Division is proposing to change
the Assisted Living unit of service
• The Division proposes a daily rate for admit and discharge
months, and a monthly rate for all other months (per the current
Nebraska Medicaid approach)
• Monthly rate would be calculated by multiplying the proposed
rate composite’s daily rate by 29.7 days (based on participant
average utilization per month) to make the unit basis change budget
neutral– Approach would reflect the average gaps in the participant
stays– Admit/discharge months would be paid up to the monthly
rate
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Division of Aging Proposed Rate MethodologiesAssisted Living
Proposed Unit of Service Changes
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Division of Aging
• The Assisted Living Level of Service tool is used to determine
the participant level (and by extension, reimbursement) during the
case management review process
• On February 20, 2019, the Indiana Health Care Association
(IHCA) and the Indiana Care for Assisted Living (ICAL) proposed
specific Assisted Living Level of Service Scoring changes, shifting
level 1 distribution towards levels 2 and 3– The IHCA/ICAL proposal
provided ten different automatic level placement overrides to
either
levels 2 or 3 for specific care needs related to medical
administration, wandering, toileting and incontinence
– The Division accepted most of the proposal, with a
modification to direct the medication administration increases to
level 2
• The Assisted Living Level of Service tool scoring changes will
be effective in August 2019, and implemented during case management
review during August-October 2019
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Division of Aging Proposed Rate MethodologiesAssisted Living
Level of Service Tool Scoring Changes
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Division of Aging
Division of Aging Proposed Rate CalculationsAssisted Living
Level of Service Tool Changes
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67%
29%
4%
Level 1 Level 2 Level 3
38%
56%
6%
Historical Distribution Before Scoring Changes
Projected Distribution After Scoring Changes
Level 2 most common after change
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Division of Aging
Division of Aging Proposed Rate Calculations Assisted Living
Rate Composite – Level 2 Starting Point
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Attendant Care
Labor Cost: $4.40
Administration: $1.10
Program Support: $0.26
EVV(1): $0.05
Total: $5.82 (15 minutes)
Home Maker
Labor Cost: $3.66
Administration: $0.92
Program Support: $0.37
EVV(1): $0.05
Total: $4.99 (15 minutes)
Respite - LPN
Labor Cost: $8.03
Administration: $2.01
Program Support: $0.48
EVV(1): $0.05
Total: $10.57 (15 minutes)
Adult Day Service (Level 2)
Labor Cost: $2.16
Administration: $0.54
Program Support: $0.35
Food: $0.35
Total: $3.40 (15 minutes)
Assisted Living (Level 2)
Attendant Care – Agency (4 units) $23.28
Home Maker – Agency (4 units) $19.96
Skilled Nursing (1.5 units, mix of LPN and RN) $16.41
Adult Day Service – Commercial (3 units) $10.20
Meals (2 meals) $6.00
Emergency Response (0.03 monthly units) $1.83
Non Medical Transportation (0.3 trips, 2 miles per trip)
$2.53
Proposed Daily Rate $80.21
Proposed Monthly Rate (29.7 days) $2,382.24
Note: (1) “EVV” component for Electronic Visit Verification
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Division of Aging
Division of Aging Proposed Rate CalculationsAssisted Living
Level Differentiation
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Proposed Rate Components Level 1ComponentsLevel 1
DifferentiationLevel 2
ComponentsLevel 3
DifferentiationLevel 3
Components
Attendant Care (agency rate) $21.16 -10% $23.28 +10% $25.61
Homemaker (agency rate) 18.15 -10% 19.96 +10% 21.96
Skilled Nursing (RN respite rate) 14.92 -10% 16.41 +10%
18.05
Adult Day Service (commercial rate) 8.46 Level 1 rate 10.20
Level 3 rate 11.73
Meals 6.00 N/A 6.00 N/A 6.00
Emergency Response 1.83 N/A 1.83 N/A 1.83 Non-medical
Transportation (base plus mileage) 2.53 N/A 2.53 N/A 2.53
Proposed Rate – Daily $73.05 $80.21 $87.71
Proposed Rate – Monthly $2,169.59 $2,382.24 $2,604.99Current
A&D Daily Rate $71.27 $78.54 $86.68A&D Daily Rate Change
+2.5% +2.1% +1.2%
Level DifferentiationProposed Rates for A&D and TBI
waivers:
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Division of Aging
Division of Aging Proposed Rate CalculationsAssisted Living
Level Differentiation - Alternatives
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Alternative ScenarioLevel 1Daily Rate
Level 1Differentiation
Level 2Daily Rate
Level 3 Differentiation
Level 3 Daily Rate
Estimated Impact Bef/Aft Scoring Change
Alternative Scenario #1 $73.05 -10% $80.21 +10% $87.71
+2.3%/5.2%
Alternative Scenario #2 $70.69 -15% $80.21 +15% $90.69
+0.4%/4.2%
Alternative Scenario #3 $68.53 -20% $80.21 +20% $93.67
-1.3%/+3.3%
Proposed Rate – Daily $72.08 -12% $80.21 +21% $94.27
+1.8%/5.2%
Current A&D Daily Rate $71.27 -10% $78.54 +10% $86.68
Current
Note: For proposed rates and alternative scenarios, variance by
level is applied for a portion of the rate. Under current rates,
variance by level is applied to the full rate.
Level DifferentiationAlternative Rates for A&D and TBI
waivers:
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Division of Aging
Division of Aging Proposed Rate Calculations A&D Rate
Changes
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$48.81
$74.02 $75.74
$76.20 $77.87
$4.00
$4.79
$5.82
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2019 1Q 2020Proposed
Atte
ndan
t Car
e 15
-min
ute
Rate
Assi
sted
Liv
ing
Daily
Rat
e
Assisted Living Before Scoring ChangeAssisted Living After
Scoring Change (Projected)Attendant Care - Agency
Assisted Living average daily rates based on each set of A&D
waiver SFY rates applied to CY 2018 distribution by level
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Division of Aging
Division of AgingEstimated Rate Impact by Service
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-10.1%
-1.6%
0.1% 0.9% 1.9% 2.3% 2.6%5.8% 6.2%
10.5%
22.4%
32.2% 33.9%
-20%
-10%
0%
10%
20%
30%
40%
Estim
ated
Pay
men
t Cha
nge
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Division of Aging
Division of Aging Estimated Rate ImpactAssisted Living Rate
Changes and Scoring Changes
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ProjectedAssisted Living
Payment Impact
Estimated Payment Change
EstimatedPayment Change
Percentage
Before Scoring Change +$2.2 M +2.3%
After Scoring Change +$4.9M +5.2%
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Division of Aging
Division of Aging Estimated Rate ImpactAssisted Living Rate
Benchmarking
Item Indiana Medicaid (Proposed)Illinois
MedicaidNebraska Medicaid
Minnesota Medicaid
Ohio Medicaid
Indiana Private Pay
Rates Daily rates:• $72.08 level 1• $80.21 level 2• $94.27 level
3
+ Room and Board payment of SSI less PNA of $52/month1
• $83.78 - $113.29 dementia care
• $65.89 - $83.55 other care (ranges based on geographic
location)
+ Room and Board payment of SSI less PNA of $90/month
Daily rates:• $40.70 rural multiple
occupancy• $48.76 urban
multiple occupancy• $55.96 rural single
occupancy• $65.95 Urban single
occupancy+ Room and Board payment of SSI less PNA of
$64/month
• $35.84 - $111.18 statewide rate for case mix levels A-L
• $429.37 statewide rate for case mix level V (vent
dependent)
+ Room and Board payment of SSI less PNA of $102/month
• $49.98 tier 1• $60.00 tier 2• $69.98 tier 3
+ Room and Board payment of SSI less PNA of $50/month
• $144 Indiana• $166 Indianapolis
area• $119 rest of state
No additional room and board payment
Unit Basis Daily and Monthly Daily Daily and Monthly Daily Daily
Daily
Method Tiered and Bundled Rate
Tiered and Bundled Rate
Tiered and Bundled Rate
Tiered and Bundled Rate
Tiered and Bundled Rate
Median private pay
Rate Effective Date
1Q 2020 July 2017 January 2019 April 2019 January 2019 2018
survey
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Note: (1) The room and board payment for Indiana Medicaid
nursing home residents averages approximately $35 per day. Total
level 2 reimbursement will be approximately $115 per day ($80.15 +
$35), or 80% of private pay ($144).
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Division of Aging
• FSSA to continue to collect and consider stakeholder feedback
• FSSA will open the formal public comment period before the end of
July 2019• FSSA will present to the State Budget Committee in
September 2019• FSSA will submit to CMS in late September/early
October 2019• A&D and TBI waivers target new rate
implementation: 1Q 2020• TBI-only services rate development, in
coordination with DDRS: 2020• Evaluation of Value-Based Purchasing
(VBP) initiatives: 2020-2021
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Division of Aging Next Steps
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Division of Aging
Questions?Submit them via email to:
[email protected]
Please see the HCBS rate methodology project website for
additional information about this process and opportunities for
stakeholders to get involved:
https://www.in.gov/fssa/ompp/5611.htm
mailto:[email protected]://www.in.gov/fssa/ompp/5611.htm
Division of Aging� �Medicaid Home and Community-Based Services
�Rate Methodology Project��Assisted Living
Services���IntroductionsAgendaOverview�FSSA Project
GoalsOverview�HCBS Rate Methodology Estimated Project
Timelines*Division of Aging�Proposed Rate Methodologies Slide
Number 7Division of Aging Proposed Rate Methodologies�Assisted
Living Proposed Unit of Service ChangesDivision of Aging Proposed
Rate Methodologies�Assisted Living Level of Service Tool Scoring
ChangesDivision of Aging Proposed Rate Calculations�Assisted Living
Level of Service Tool ChangesDivision of Aging Proposed Rate
Calculations �Assisted Living Rate Composite – Level 2 Starting
PointDivision of Aging Proposed Rate Calculations�Assisted Living
Level DifferentiationDivision of Aging Proposed Rate
Calculations�Assisted Living Level Differentiation -
AlternativesDivision of Aging Proposed Rate Calculations �A&D
Rate ChangesDivision of Aging�Estimated Rate Impact by
ServiceDivision of Aging Estimated Rate Impact�Assisted Living Rate
Changes and Scoring ChangesDivision of Aging Estimated Rate
Impact�Assisted Living Rate BenchmarkingDivision of Aging Next
StepsQuestions?��Submit them via email
to:�[email protected] ��Please see the HCBS rate
methodology project website for additional information about this
process and opportunities for stakeholders to get involved:
�https://www.in.gov/fssa/ompp/5611.htm ��
