Changes to Medicaid’s supported living rates are being finalized following the completion of an intensive cost survey of Idaho providers.  This benefit pays for caregivers to support developmentally disabled adults in their own residence rather than in an institution or in a certified family home.

A group of supported living providers had previously sued the Department of Health and Welfare, contending that rates were too low to support their services.  The 9^th Circuit Court enjoined the department to pay a higher rate for these services.  The Office of the Attorney General contested this case up to the United States Supreme Court, which resulted in the landmark Armstrong vs. Exceptional Child Center decision last December that established that providers do not have standing to sue states to increase their reimbursement.

In January, Medicaid announced that it would adjust rates back to the time the original lawsuit was filed as a consequence of the Supreme Court ruling.  Providers reacted with concern and in some cases there were reports of providers planning to abruptly discontinue services, which could have resulted in negative outcomes for program participants.  Medicaid leadership met with providers and agreed to conduct an independent cost survey to determine the actual costs of services and adjust rates accordingly.

With completion of the survey, the department has approached rate development carefully, meeting with providers on several occasions to discuss equitable rates.   While providers still have concerns, the rates are based on actual costs of providers.  The survey analysis evaluated direct care staff wages, employee related costs, and administrative expenses and profits.  By using the survey data, the methodologies established in state rules, and through meetings with providers, Medicaid leadership determined the reimbursement rate should be 15 percent higher than the raw cost survey calculations.

Based on the survey results and provider meetings, the hourly and high categories of care will decrease from the current temporary rates, while the rate for intense care will increase.

The rates must be approved by the federal Centers for Medicare and Medicaid Services (CMS) before being finalized.  Medicaid will be amending their agreement with CMS for this rate methodology and will post their amendment document on the DHW website for public comment during the next few weeks.  The earliest the rates could be implemented under federal timelines is March 1^st.

Read the letter sent Monday to Idaho Medicaid Supported Living providers that explains the survey and rates.