Provider Notice issued 06/03/03

MDS Based Reimbursement System

Public Act 92-848 requires implementation of a payment methodology based on the Minimum Data Set (MDS) for calculating the nursing component of the nursing facility Medicaid rate by July 1, 2003. The Act also provides for a two-year transition period, which would hold harmless any facility that would receive a lower nursing component rate under the new system.

You have received several notices, beginning July 1, 2002, from the Department of Public Aid (DPA) regarding the implementation of the new system and the importance of accurate MDS data being submitted to DPA. Accurate MDS data is critical in ensuring that facilities receive a Medicaid rate correctly based on the needs of Medicaid-eligible residents. The MDS for each resident will continue to be completed in accordance with the federal Long Term Care Resident Assessment Instrument User's Manual, version 2, as may be hereafter amended or and modified.

DPA, in coordination with long term care association representatives and the Department of Public Health, developed rules relating to the MDS based Medicaid reimbursement system. The proposed rules were published in the May 30, 2003, Illinois Register. Outlined below are important requirements from the proposed rules. You may also access the proposed rules on the department's Web site at <http://www.dpaillinois.com/releases/>.

• Effective July 1, 2003, all Medicare and Medicaid certified nursing facilities or distinct part units of facilities will be required to complete and submit to the department a full MDS each quarter for each resident, regardless of payment source. Facilities are no longer required to complete and submit the MDS Quarterly Assessment Form. When completing the full MDS for quarterly submittal to the department, Resident Assessment Protocols (RAPs) are not to be submitted. RAPs are required only when completing an MDS at admission, annually, for a significant change or for a significant correction of a prior full assessment. Sections T and U must continue to be completed when completing and submitting the full MDS.
  
• The nursing component will be based upon a composite of MDS data collected from each Medicaid-eligible resident. Residents, for whom MDS resident identification information is missing or inaccurate, will be placed in the lowest MDS acuity level for payment purposes for that quarter.

If you have any questions, please call the Bureau of Long Term Care at 217-524-7244

Anne Marie Murphy, Ph.D.
Administrator
Division of Medical Programs