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Ohio Budget Finalized – Significant Focus Needed on Quality Incentive Payment

Updated: Aug 1, 2023

On July 3, 2023 the Ohio House Bill (HB) 33 for state fiscal year 2024-2025 was finalized. This budget update significantly impacts skilled nursing facilities and will impact payment received starting on July 1, 2023. Operationally, multiple decisions will need to be made for each SNF organization on how to move forward with 10/1/23 MDS changes and case mix impacts. Additionally, the significant changes and expansions to the Quality Incentive Payment measures create a significant need for SNFs to focus on these measures. A copy of HB33 can be found here.

Multiple changes occurred to the HB33 throughout the rule making process, and we finally have clarity on what to expect moving forward with the 10/1/23 MDS changes, the optional state assessment, and finalization with expanding Quality Incentive Payment measures. Below is a summary of the changes that SNFs need to know and 8 immediate action steps that providers should take to prepare.

Case Mix and 10/1/23 MDS Changes

Upcoming October 1, 2023 MDS changes have forced states to make decisions on how case mix is calculated and used towards Medicaid payment, most significantly with the removal of Section G of the MDS. CMS has given states the ability to decide between switching to a PDPM methodology for case mix or using what is called an Optional State Assessment (OSA). The HB 33, along with a memo to NF providers from the Ohio Department of Medicaid identifies the approach the Ohio Department of Medicaid is going to take:

Ohio will continue to use RUG-IV 48 grouper to determine direct care rates for this biennium (state FY 2024-2025). Due to the 10/1/23 MDS changes, Ohio RUG case mix scores will only be able to be calculated through the completion of OSAs starting with 10/1/23. A provision was added to ORC 5165.192 that will allow providers to decide to “freeze” case mix scores for this biennium, which would eliminate the need for that facility to complete an OSA.

  • SNFs will be required to report through an online tool of their choice by October 1, 2023 deadline. The options will be:

    • Continue to have quarterly RUG scores for case mix, which will require the completion of the OSA OR

    • Freeze the direct care rate using quarterly case mix score from March 2023, thereby eliminating the need for OSA

  • If a facility fails to make a decision, the default will be to continue quarterly RUG scores for case mix.

  • The decision made will apply to the two year biennium, unless statutory changes are made in the meantime.

  • If a SNF freezes the direct care rate, March 2023 case mix scores will set the direct care rate for two years.

  • If freezing the rate, any Medicaid resident that grouped into a PA1/2 category in the March 2023 report will remain at that level for biennium. In addition, no new resident would be included in the facility case mix scores for the next two years.

Quality Incentive Payment (QIP) Expansions & Changes

The Quality Incentive Payment program has historically existed on the SNF performance of four long stay quality measures (pressure ulcers, UTIs, catheters, and move independently worsened). The HB 33 highlights the states direction into expanding the QIP with not only additional funding but also with increased measures. A few notable changes to expect include:

July 1, 2023 QIP Update

  • Providers will only be eligible for the QIP If they are above the 25th percentile threshold for the state of Ohio, based on the four existing quality measures.

  • 7.5 additional quality points are eligible and added to a provider’s total score if census is >75% for calendar year 2022, as reported in your 2022 cost report (Beds surrendered before 7/1/23 are removed from denominator)

For the Quality Measure portion of the QIP, each point value is out of 22.5 possible points for the following measures. This includes data from all four quarters of 2022. These final numbers can be obtained from your April, May and June 2023 Five-Star Preview Report.

  • Hi-risk pressure ulcers (5 points)

  • UTI (5 points)

  • Catheter use (5 points)

  • Ability to move independently worsened (7.5 points)

If a facility meets the minimum 25th percentile threshold, the total points available for the QIP becomes 30 due to the 7.5 point additional occupancy rating.

January 1, 2024 QIP Update:

With these QIP changes, the HB33 also identifies that the QIP system will rebase every January and July with updated data on measures. The January 1, 2024 updated QIP will be based on Quarter 3 2022, Q4 2022, Q1 2023, and Q2 2023 as follows:

  • Hi-risk pressure ulcers (5 points)

  • UTI (5 points)

  • Catheter use (5 points)

  • Ability to move independently worsened (7.5 points)

  • Occupancy rating >75% 2022 (7.5 points)

July 1, 2024 QIP Update:

The QIP program will expand for July 1, 2024 payment updates to include four additional measures for a total of a maximum 50.5 points. Of significance, this update will include data collected during all four quarters of 2023. As we are currently in July of 2023, the first two quarters of 2023 have already passed.

  • Hi-risk pressure ulcers (5 points)

  • UTI (5 points)

  • Catheter use (5 points)

  • Ability to move independently worsened (7.5 points)

  • Occupancy rating >75% 2023 (Decreased to 3 points)

  • Fall with major injury (5 points)

  • Antipsychotic medication (7.5 points)

  • ADL Decline (7.5 points)

  • Total nurse staffing hours (reported in PBJ) (5 points)

Now What:

There are 8 immediate actions SNF Leadership should take now to plan and prepare for the implementation of HB 33

  1. Work internally or with a trusted advisor to calculate your current and projected QIP points based on quality measure performance.

  2. Determine your occupancy percentage on your 2022 Cost Report to identify if census is above 75% threshold.

  3. Determine if you will qualify for the QIP incentive and estimated financial impact.

  4. Evaluate your March 2023 case mix performance. Be certain to identify the impact of all residents grouped into PA1-2, as these residents must remain at this level for two years with no option to change if you make the decision to “freeze”.

  5. Work internally or with a trusted advisor to determine if facility should opt to freeze the current case mix direct care rate (excluding PA1-2 residents) or remain active in the RUG-based case mix system using the OSA.

  6. Determine impact of “freezing” decision on MDS department and labor. OSA completion will require additional time to complete the assessments as well as will impact your facility process for tracking of ADLs. Evaluate the time impact of OSA completion on current staffing levels and/or create additional capacity by restructuring MDS department roles and duties.

  7. Evaluate facility performance level with the 4 emerging quality measures that will be included in 7/1/24 calculations- work to assure processes with tracking and management of these quality measures now.

  8. Evaluate your MDS staff’s knowledge and skill level with managing case mix and quality measures. Work with a trusted advisor to upskill your current staff and new hires to assure financial stability and compliance for your facility.

Do you need support with managing the changes and evaluating your facility’s current QIP position? Our affiliate, Engage Consulting, provides the following services to assist your facility through the transition:

  • A complete QIP calculation and projection and analysis of case mix “freeze” impacts

  • MDS department role delineation and FTE needs analysis

  • Case mix management training and education

  • Monthly Case mix strategy, auditing and projections

  • Quality Measure management training and education

  • Monthly Quality measure strategy, auditing and education

Contact a Post-Acute Care Specialist for more information at

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