ADvancing States is pleased to announce the release of a new issue brief “Addressing Nursing Facility Financing Challenges during MLTSS Program Development," developed in collaboration with Milliman. This brief is intended to shed light on the complex and often-misunderstood relationship between nursing facility financing and Medicaid delivery system design.

Martha Roherty, ADvancing States Executive Director, believes this issue brief is a significant addition to the published body of knowledge about this topic. “As we help states think through their program design considerations for an MLTSS program, nursing facility taxes which finance a large portion of a state’s LTSS system looms large. This paper fills a gap in current writings about this topic, as well as helping states identify potential solutions.”

Although states will need to change the mechanisms used to pay for nursing facility services as they transition to managed care, this research shows they have options, including pass-through payments and state-directed payments using minimum fee schedules, to sustain current Medicaid financing arrangements. Moreover, our research and interviews with states that have already transitioned to an MLTSS delivery system showed that early, frequent, and ongoing stakeholder engagement with nursing facility providers is key to a successful transition.

Jill Herbold, co-author of the issue brief and principal and consulting actuary with Milliman noted, “Successful LTSS reform requires careful consideration of changes that may be needed to existing Medicaid financing structures, in particular for nursing facility services. Milliman is pleased to collaborate with ADvancing States on this paper that provides options for states as they consider the best path forward.”

This is the latest publication from the MLTSS Institute, which was established in 2016 to drive improvements in key managed long-term services and supports (MLTSS) policy areas, facilitate sharing and learning among states, and provide direct and intensive technical assistance to states and health plans. Since 2016, the MLTSS Institute has published eight issue briefs on topics ranging from MLTSS tools to help address the workforce crisis to state considerations on implementing integrated care programs. 

ADvancing States hopes that this report will provide useful context for the development of new MLTSS programs and highlight the approaces that states considering MLTSS as a delivery system could take to address this foundation issue for Medicaid state financing.

Click here to read the report.