Medicaid

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Medicaid is the largest source of funding for long term services and supports, including nursing home care and personal care services. The majority of Medicaid dollars is spent on services for the elderly and individuals with disabilities. AHCA/NCAL provides resources and solutions for policymakers and members to complex Medicaid issues at the state and federal level.

 
Key Facts about Medicaid
  • Medicaid is the primary source of coverage for nearly two out of every three (63 percent) nursing home residents.
  • Almost one in five (18 percent) assisted living residents relies on Medicaid to pay for daily services.
  • Virtually all 55,000 individuals with disabilities residing in an intermediate care facility (ICF) are on Medicaid.
  • As of 2019, Medicaid covered only about 82 cents of every dollar spent on nursing home care.
  • Medicaid covers long term services and supports (LTSS) to help individuals with basic activities of daily living, like bathing, dressing, and walking. Many of these critical services are not covered by Medicare or private insurance.
For Medicaid advocacy resources, visit the AHCA/NCAL Advocacy page.

Medicaid: A Vital Lifeline for Long Term Care Residents

Nursing Homes
Among all groups of providers providing services to the Medicaid population, nursing homes have the highest percentage of Medicaid beneficiaries. On any given day, 1.3 million nursing home residents, or 2 out of every 3, rely on Medicaid to cover their cost of care.

Each state’s Medicaid program is required to provide nursing facility services to eligible beneficiaries aged 21 and older. Facilities that are Medicaid certified nursing homes typically provide skilled nursing care, rehabilitative care, and/or long term care.

The services covered by Medicaid may vary slightly from state to state, but it federal requirements include a list of nursing and specialized rehabilitative services that promote the full physical, mental, and psychosocial wellbeing of every resident such as:
  • Medically related social services
  • Pharmaceutical services
  • Dietary services
  • Professionally directed program activities
  • Room and bed maintenance services
  • Routine personal hygiene

Individuals who come to nursing homes for skilled care often need help with several activities of daily living, such as eating, bathing, and dressing. Many of these individuals come to nursing facilities for a limited time to receive rehabilitation needed due to an injury, disability, or illness.

Medicaid currently fails to cover the actual cost of nursing home care, at an average of 82 cents for every dollar.

Assisted Living
Low-income individuals may be able to utilize Medicaid to help cover the cost of assisted living services, depending on their state's Medicaid program. Almost 1 in 5 assisted living residents relies on Medicaid to pay for daily services (18%). State Medicaid programs can cover home and community-based services (HCBS) such as personal care and supportive services provided in assisted living communities. Medicaid does not pay for room and board costs.

States can use several different Medicaid authorities to cover such services in assisted living:
  • Medicaid state plan authorities,
  • § 1915(c) HCBS waiver,
  • concurrent § 1915(b) managed care waiver, or
  • §1115 research or demonstration programs.
Note, a small minority of state Medicaid programs do not cover services in assisted living.

Over time, spending on Medicaid long-term services and supports (LTSS) has shifted from traditional settings of care towards HCBS settings.
  • 64.6% ($129.4 billion) of Medicaid long term care services and supports spending was on HCBS in 2022, an increase from the $115 billion spent the year prior.

>> Learn​ More - NCAL Facts & Figures

ID/DD
Virtually all 55,000 individuals with disabilities residing in the nation’s 5,300 intermediate care facilities (ICF) are on Medicaid.

Many of these individuals are non-ambulatory, have seizure disorders, behavior problems, mental illness, visual or hearing impairments, or a combination of the above.

ICFs provide active treatment and services for people with significant support needs. They offer 24-hour supervision, health care, therapies, activities, and training intended to maximize residents’ autonomy and independence.

>> ID/DD Medicaid Issue Brief

Resources
AHCA/NCAL regularly produces resources for members, legislators, and the public on the vital role of Medicaid in long term and post-acute care. Below is a listing of recent relevant issue briefs, press releases, and papers from AHCA/NCAL.

‭(Hidden)‬ Managed Long Term Services and Supports (MLTSS)
​In June 2013, the Association released its first analysis of existing Managed Long Term Services and Supports (MLTSS) structures in the U.S. The analysis found that the managed long term care model has unclear cost savings and quality outcomes for residents, patients, and providers. States have limited experience with MLTSS, and implementation brings a different set of challenges in the long term and post-acute care setting.
 
AHCA/NCAL released its MLTSS analysis in conjunction with a toolkit that members can use when evaluating or enhancing current MLTSS programs in their state and nine guiding principles.
 

Resources

  • Guiding Principles
    These 9 principles help guide MLTSS implementation in states, with a focus on residents and patients. They are designed to ensure access, improve quality, and enhance choice in a managed care environment.
  • Analysis
    This analysis provides an overview of MLTSS programs and discusses implications for the Centers for Medicare and Medicaid Services' Financial Alignment Initiative and explores state experiences with MLTSS and managed acute care.
  • Toolkit - Members Only (Login Required)
    This toolkit is based on 9 guiding principles that AHCA believes must be part of any Medicaid MLTSS program. It includes suggestions for statutory, regulatory, or contractual agreement language and a checklist for MLTSS plan contracts.
  • Managed Care Playbook
  • Guide to Antitrust Compliance for Providers Considering Collaborative Contracting

‭(Hidden)‬ Medicaid Fiscal Accountability Proposed Regulation
​

The Centers for Medicare and Medicaid Services (CMS) issued a proposed Medicaid Fiscal Accountability Regulation on November 11th, 2019 that impacts provider assessments and upper payment limit (UPL) programs. While CMS states its aim is to "eliminate state financing gimmicks," it is important to note that CMS is not proposing to eliminate provider tax, inter-governmental transfers (IGT), and supplemental payments. Nevertheless, this rule would have significant negative impacts on funding.

CMS is proposing significant changes in the regulations that frame permissible provider taxes and various UPL programs. For most of the changes, CMS is providing two to three years for state programs to come into compliance.


Implications for Provider Taxes:

  • State programs that do not have a waiver and if the provider tax-based dollars are in base rates, not paid in a lump sum outside the waiver, appear to be in compliance with the proposed rule. 
  • There are new requirements for waivers to be broad-based and uniform. If the state waiver is not compliant, the state will have three years to come into compliance. 
  • Any amendment to a waiver after the rule is effective must be compliant immediately, as part of the amendment process;
  • New waivers after the rule is effective must be compliant when submitted;   
  • Waivers will need to be renewed every three years. During this renewal process, waivers will be assessed for compliance using tests laid out in the proposed rule. 
  • States that pay the provider tax-based payment outside of the base rate will face new requirement, forcing these states to start making payments in the base rate. 
  • Click here to see which states have a nursing home provider tax. 

Implications for UPL and IGT Programs:

  • Additional and more stringent requirements are added for UPL programs.
  • Each state will need to look at its program closely to determine what changes need to be made to be compliant. It is possible that the requirements may not be surmountable for some states.
  • States with IGT-based supplemental payments will be required to renew their programs, much like a Medicaid waiver. 
  • Those approved three or more years before the effective date of the rule will expire two calendar years following effective date of rule
  • Those approved less than three years prior to effective date will expire three calendar years following the effective date. 

AHCA/NCAL is working with other provider and beneficiary groups to address the challenges proposed in this rule. The Association is also working with Joe Lubarsky, the premier national expert in this area, and our state affiliates to identify the impact these changes would have in each of the 50 states and DC.

Please address any questions, comments, or concerns to medicaidfiscalrule@ahca.org. This inbox will be monitored daily and responses will be issued as soon as possible.

Contact
Martin Allen
Senior Vice President, Reimbursement Policy

Issue Briefs

External Links