• To vote against the Governor’s proposed Medicaid provider rate cut, as outlined in his 2017-2019 Biennium Budget and included in the amounts listed in LB327, and support appropriate funding for the services needed by vulnerable Nebraskans.
  • To support LB649, which would prohibit the addition of services or populations to the managed care program until at least Jan. 1, 2019, or until a critical evaluation is performed of the at-risk capitated Medicaid managed care program and the success of such managed care program is proven, whichever is later.

LB327

The Governor’s biennium budget bill includes an aggregate rate cut of 3 percent for all providers. This would be $10,540,025 for nursing facility services and $829,829 for Medicaid Waiver assisted living.

  • In Nebraska, nursing facilities are underpaid by Medicaid an average of $25 per day per person.
  • Any rate decrease will force facilities to make cuts to jobs and services, limit admissions and, in some cases, close their doors altogether. Nebraska facilities have sustained rate cuts before and managed to maintain quality standards. However, the proposed cut is the last some facilities can reasonably sustain. On its own, the proposed cut may not look significant but, with ever-changing regulatory requirements and unprecedented workforce shortages, this would be a devastating cut.
  • Over the next decade, the need for all direct care workers in Nebraska is expected to grow by 19 percent, compared to 10 percent for all occupations.
  • The State is proposing cuts to Medicaid provider rates at the same time it is poised to fund insurance companies for managing these services. These dollars would be better utilized paying for care within Nebraska’s communities.
  • Nebraska is currently paying insurance companies with funds previously used to reimburse Medicaid services provided to Nebraskans. In 2017, per their contract, Nebraska plans to pay these three managed care organizations (MCOs) nearly $1.2 billion, allowing them to use 12 percent of this funding ($141 million) for administration and to retain 3 percent for their profit ($35 million). In 2018, Nebraska plans to provide the MCOs an increase of 4.26 percent ($16.7 million) and an additional 4.26 percent increase ($17.4 million) in 2019.

Please vote against the provider rate decrease included in the Governor’s proposed budget and support appropriate funding for the services provided to Nebraskans by Nebraskans.

LB649

LB 649 would prohibit the addition of services or populations to the Medicaid managed care program until at least Jan. 1, 2019, or until a critical evaluation is performed of the at-risk capitated Medicaid managed care program and the success of such managed care program is proven, whichever is later.

  • Other states have shown that, when it comes to managed care, the management of long-term care and acute care services is significantly different, as are the populations served. Individuals living with multiple chronic services are a much more vulnerable population than the able-bodied populations typically served by managed care.
  • Of the eight states that have implemented statewide managed long-term care services, we are unaware of documented success. In fact, on Jan. 13, 2017, CMS notified the State of Kansas of their termination of the program as of Dec. 31, 2017, pending their correction of the identified deficiencies. Currently, the Kansas Legislature has begun conducting hearings to address the non-compliance issues.
  • While DHHS has assured stakeholders of the advantages of managed care, there does not appear to be baseline data to use for comparison and against which meaningful measurements can be made.
  • It is imperative that claims are paid accurately and timely to meet facilities’ financial obligations. Currently, Medicaid electronic claims are paid by the State within a couple of days and paper claims are paid within 1-2 weeks. The managed care organizations (MCO) are allowed 30 days to pay a “clean” claim and much longer to pay claims they determine are not “clean.” Although other states with managed long-term care, such as Kansas, have the same 30-day claim payment requirement, providers report delays in claim payments of several months. Nebraska providers serving a high percentage of Medicaid beneficiaries will not be able to sustain operations without payment for that length of time.
  • While Medicaid continues to underfund the cost of care, it becomes even more challenging to provide high-quality care in Nebraska when an underfunded service is included in a program operated by insurance companies, whose goal is to reduce costs.
  • Communications between the MCO and Medicaid recipient is dependent on technology that can be challenging for the vulnerable elderly or disabled resident. These residents are likely to require significantly more assistance from the facility staff, without reimbursement.

Please support LB649 to allow for a demonstration of how managed care could work successfully in integrating long-term care services. And, if success cannot be demonstrated through a critical evaluation, the State will have likely saved millions of dollars that would have otherwise been paid to insurance companies.