July 1, 2017 Rate Updates

The Department of Health (DOH) has finalized the July 1, 2017 reimbursement rates that will allow for a more accurate and balanced reimbursement rate. These final rates were loaded on January 11, 2018. The following describes the changes that will be made to adjust reimbursement:

Effective July 1, 2017

  • Rates will be calculated based on data that was reported on the 2014-15/2015 cost reports that were submitted as of January 3, 2017. The DOH will be working hard to minimalize and/or remove negative interest impacts associated with the retroactive nature of these rate changes.
  • The DOH is investing new resources of $27 million that will be added to four critical Waiver services through budget neutrality corridors.
  • The DOH will also be adding $10 million of additional resources to be incorporated into the draft ICF rates. The ICF rates are receiving additional resources to recognize costs that should have been included but were mistakenly excluded.

Effective January 1, 2018

  • Providers who operated residential services with vacant capacity during the 2016-17 rate period will receive an occupancy adjustment that will be retroactive to July 1, 2017. Each provider will receive a residential rate increase that is the lesser of their vacancy percentage or 5%.
  • For any providers located in upstate New York, its property will be updated and will also include new properties that have had its costs verified by the DOH.
  • Rates will be revised to compensate for the increase in New York State’s minimum wage as well as an increase of 3.25% in reimbursement for direct care and support personal services and fringe benefits.

Effective April 1, 2018

  • Reimbursement will be increased by 3.25% to adjust for direct care and support personal service and fringe benefits. There will also be an increase of 3.25% to provide funding for clinical staff compensation.

Effective July 1, 2018

  • Due to the fact that rates will be calculated on the 2014-15/2015 cost reports, the DOH will give providers an opportunity to resubmit their cost reports for that period within a pre-determined and specific time period. All changes that are made to the cost reports must be properly identified, documented, and submitted to the DOH. Once submitted, the DOH will notify agencies if the revised cost reports have been accepted. To help with this, DOH along with OPWDD and OMIG, will hold educational sessions about the cost report review.
  • Based on the revised CFR’s submitted, the rates will be recalculated using this new data and will be effective July 1, 2018. These rates will not be retroactive.
  • The budget neutrality adjustments included in the July 1, 2017 rates will be evaluated in the 2018-19 OPWDD budget.

If these final rate updates affects you, please let us know if we can help you understand the potential ramifications.

If you would like to learn more about this topic, please contact:

Kenneth R. Cerini, CPA, CFP, FABFA

Kenneth R. Cerini, CPA, CFP, FABFA

Managing Partner

Ken is the Managing Partner of Cerini & Associates, LLP and is the executive responsible for the administration of our not-for-profit and educational provider practice groups. In addition to his extensive audit experience, Ken has been directly involved in providing consulting services for nonprofits and educational facilities of all sizes throughout New York State in such areas as cost reporting, financial analysis, Medicaid compliance, government audit representation, rate maximization, board training, budgeting and forecasting, and more.