Adjustments to Standard Nursing Facility Rates

(1) Certification of Public Expenditures of a Nursing Facility Owned and Operated by a Municipality. (a) Within 60 days after the filing of its Medicare CMS-2540 cost report, a nursing facility, which is owned and operated by a municipality, may submit a request for Certified Public Expenditures (CPE) to EOHHS. This CPE will account for its public expenditures of providing Medicaid services to eligible Medicaid members. The submission will be based on the inpatient routine service cost reported on the CMS-2540 Medicare cost report. (b) Following review of the nursing facility’s submission, EOHHS will, within 60 days of the submission, approve, deny, or revise the amount of the CPE request based upon its evaluation of the reported costs and payments. The final approved amount will be equal to the difference between the Medicaid interim payments and the total allowable Medicaid costs as determined by EOHHS. This final determined amount will be certified by the municipality as eligible for federal match. (c) Interim payments are based on the standard payment methodology pursuant to 101 CMR 206.00. (d) EOHHS will determine total allowable Medicaid costs based on the Medicare CMS-2540 Cost Report and will determine a per diem rate calculated as follows. 1. Medicaid Allowable Skilled Nursing Facility Costs. Total allowable costs (Worksheet B, Part I, Line 30, Col 18), divided by total days (Worksheet S-3, Line 1, Col 7), times Medicaid days (worksheet S-3, Line 1, Col 5). 2. Medicaid Allowable Nursing Facility Costs. Total allowable costs (Worksheet B, Part I, Line 31, Col 18), divided by total days (Worksheet S-3, Line 3, Col 7), times Medicaid days (Worksheet S-3, Line 3, Col 5). 3. Total Allowable Medicaid Costs. The sum of the amount determined in 101 CMR 206.06(1)(d)1. and 2. (e) EOHHS will calculate an interim reconciliation based on the difference between the interim payments and total allowable Medicaid costs from the as-filed CMS-2540 Cost Report. The nursing facility must notify EOHHS immediately if the CMS-2540 is reopened or an audit is completed. Within 60 days after receiving notification of the final Medicare settlement EOHHS will retroactively adjust the final settlement amount. (2) Quality Adjustments. Beginning October 1, 2025, a nursing facility may be eligible for a quality adjustment in the form of an increase or decrease applied to the facility’s nursing standard rate and operating standard rate at each PDPM nursing case mix category. The quality adjustment will be equal to the sum of the percent increase or decrease assessed for performance on each of the following three quality measures: Quality Achievement Based on CMS Score, Quality Achievement Based on DPH Score, and Quality Achievement Based on CMS Score on Number of Hospitalizations. (a) Quality Achievement Based on CMS Score. The quality adjustment a nursing facility will incur under the measure “Quality Achievement Based on CMS Score” will be based on the facility’s overall rating on the Centers for Medicare and Medicaid Services Nursing Home Compare 5-Star Quality Rating Tool as of April 2025, as described in the table below. Facilities that CMS has designated as not rated due to a history of serious quality issues (i.e., Special Focus Facilities) will be considered to have a score of 1 for the purposes of this quality adjustment. CMS Overall Score as of April Adjustment Percentage -2.50% -2.00% -1.00% 0.00% 1.00% 2.00% (b) Quality Achievement Based on DPH Score. The quality adjustment a nursing facility will incur under the measure “Quality Achievement Based on DPH Score” will be based on the facility’s performance on the Department of Public Health’s Nursing Facility Survey Performance Tool (DPH NFSPT) as of April 1, 2025, as follows: DPH NFSPT Score as of April 1, 2025 Adjustment Percentage 108 or less -3.00% 109 - 113 -2.00% 114 - 118 0.00% 119 - 123 1.00% 124+ 2.00% (c) Quality Score Based on CMS Number of Hospitalizations. The quality adjustment a nursing facility will incur under the measure “Quality Score Based on CMS Number of Hospitalizations” will be based on the facility’s adjusted score on the Centers for Medicare and Medicaid Services Nursing Home Claims Quality Measure for number of hospitalizations per 1000 long-stay resident days as of June 1, 2025, as follows: CMS Adjusted Score Adjustment Percentage 1.33 or less 2.00% 1.34 - 1.69 1.00% 0.00% 1.71 - 2.13 -1.00% 2.14+ -2.00% (3) Kosher Food Services. Nursing facilities with kosher kitchen and food service operations may receive an add-on of up to $5 per day to reflect the additional costs of these operations. (a) Eligibility. To be eligible for this add-on, the nursing facility must 1. maintain a fully kosher kitchen and food service operation that is, at least annually, rabbinically approved or certified; and in accordance with all applicable requirements of law related to kosher food and food products, including but not limited to, M.G.L. c. 94, § 156; 2. provide to the Center a written certification from a certifying authority, including the complete name, address, and phone number of the certifying authority, that the applicant’s nursing facility maintains a fully kosher kitchen and food service operation in accordance with Jewish religious standards. For purpose of 101 CMR 206.06(3)(a)2., the phrase “certifying authority” will mean a recognized kosher certifying organization or rabbi who has received Orthodox rabbinical ordination and is educated in matters of Orthodox Jewish law; 3. provide a written certification from the administrator of the nursing facility that the percentage of the nursing facility’s residents requesting kosher foods or products prepared in accordance with Jewish religious dietary requirements is at least 50%; and 4. upon request, provide the Center with documentation of expenses related to the provision of kosher food services, including but not limited to, invoices and payroll records. (b) Payment Amounts. 1. To determine the add-on amount, EOHHS will determine the statewide median dietary expense per day for all facilities. The add-on equals the difference between the eligible nursing facility’s dietary expense per day and the statewide median dietary expense per day, not to exceed $5 per day. In calculating the per day amount, EOHHS will include allowable expenses for dietary and dietician salaries, payroll taxes and related benefits, food, dietary purchased service expense, dietician purchased service expense, and dietary supplies and expenses. The days used in the denominator of the calculation will be the higher of the nursing facility’s actual days or 96% of available bed days. 2. EOHHS will compare the sum of the add-on amounts multiplied by each nursing facility’s projected annual rate period Medicaid days to the state appropriation. In the event that the sum exceeds the state appropriation, each nursing facility’s add-on will be proportionally adjusted. (101 CMR 206.06(4) Reserved) (5) Leaves of Absence. If a purchasing agency pays for leaves of absence, the payment rate for a leave of absence day is $80.10 per day, unless otherwise determined by the purchasing agency. (6) Nursing Cost. Eligible facilities will receive a $99.58 per diem add-on to reflect the difference between the standard payment amounts and actual base year nursing spending. To be eligible for such payment, the Department of Public Health must certify to EOHHS that over 75% of the nursing facility’s residents have a primary diagnosis of multiple sclerosis. (7) Pediatric Nursing Facilities. (a) Beginning October 1, 2025, EOHHS will determine payments to facilities licensed to provide pediatric nursing facility services using allowable reported operating costs, excluding administrative and general costs, from the nursing facility's 2019 Cost Report. EOHHS will include an administrative and general payment capped at the 85th percentile of the 2019 statewide administrative and general costs. EOHHS will apply an appropriate cost adjustment factor to operating and administrative and general costs. (b) The operating component of the rate is increased by a cost adjustment factor of 27.50%. (c) Facilities licensed to provide pediatric nursing facility services will receive the operating rate which is the greater of 1. the rates calculated as described in 101 CMR 206.06(7)(a) and 101 CMR 206.06(7)(b); or 2. the Operating Cost Standard rate as listed in 101 CMR 206.04(2). (d) Beginning October 1, 2025, EOHHS will determine capital payments to facilities licensed to provide pediatric nursing facility services by applying a cost adjustment factor of 3.40% to the pediatric facility capital rates in effect as of September 30, 2025. (101 CMR 206.06(8) Reserved) (9) Receiverships. EOHHS may adjust a nursing facility’s standard rates if a receiver has been appointed under M.G.L. c. 111, § 72N solely to reflect the reasonable costs, as determined by EOHHS and the MassHealth agency, associated with the court-approved closure or sale of the nursing facility or other appropriate situation. (10) Residential Care Beds. Beginning October 1, 2025, the total payment for nursing and other operating costs for residential care beds in a dually licensed nursing facility is $140.41. (11) State-operated Nursing Facilities. A nursing facility operated by the Commonwealth will be paid at the nursing facility’s reasonable cost of providing covered Medicaid services to eligible Medicaid members. (a) EOHHS will establish an interim per diem rate using a base year CMS-2540 cost report inflated to the rate year using the cost adjustment factor calculated pursuant to 101 CMR 206.06(11)(b) and a final rate using the final rate year CMS-2540 cost report. (b) EOHHS will determine a cost adjustment factor using a composite index using price level data from the CMS Nursing Home without capital forecast, and regional health care consumer price indices, and the Massachusetts-specific consumer price index (CPI), optimistic forecast. EOHHS will use the Massachusetts CPI as proxy for wages and salaries. (c) EOHHS may retroactively adjust the final settled amount when the Medicare CMS-2540 cost report is reopened or for audit adjustments. (101 CMR 206.06(12) through (13) Reserved) (14) High Medicaid Adjustment. Beginning October 1, 2025, a nursing facility may be eligible for a High Medicaid Adjustment to its payment rate, based on the proportion of the facility’s total resident days which are Massachusetts Medicaid days, as reported on the facility’s quarterly User Fee Assessment Forms covering the period April 1, 2024, through March 31, 2025. For the purpose of determining eligibility for the High Medicaid Adjustment, the proportion of the facility’s total resident days which are Massachusetts Medicaid days will be rounded to the nearest hundredth of a percent. (a) A facility for which its Massachusetts Medicaid days are at least 70.00% and less than 75.00% of its total resident days will receive a 3% upward adjustment applied to its nursing standard rate and operating standard rate at each PDPM nursing case mix category. (b) A facility for which its Massachusetts Medicaid days are at least 75.00% and less than 90.00% of its total resident days will receive a 6% upward adjustment applied to its nursing standard rate and operating standard rate at each PDPM nursing case mix category. (c) A facility for which Massachusetts Medicaid days are at least 90.00% of its total resident days will receive a 9% upward adjustment applied to its nursing standard rate and operating standard rate at each PDPM nursing case mix category. (d) EOHHS will not adjust any High Medicaid Adjustment solely because a facility under- reported Massachusetts Medicaid days in its quarterly User Fee Assessment Form. (15) Maximum Change Adjustment. Beginning October 1, 2025, a nursing facility will be subject to an adjustment to its total standard nursing facility per diem rate at each PDPM nursing case mix category established through 101 CMR 206.04, 101 CMR 206.05, 101 CMR 206.06(2) through (14), and 101 CMR 206.12(4), if a facility’s proposed total average per diem rate, beginning October 1, 2025, calculated using the facility’s average PDPM nursing case mix in the period January 1, 2024, through December 31, 2024, using the 2024 Centers for Medicare and Medicaid Services (CMS) PDPM case mix index, is greater than 112% of the facility’s total average per diem standard nursing facility rate that was in effect on September 30, 2025, calculated using the facility’s average PDPM nursing case mix in the period January 1, 2024, through December 31, 2024, using the 2022 CMS PDPM case mix index. The adjustment will be calculated as follows: (a) determine the facility’s proposed total average per diem rate, calculated using the facility’s average PDPM nursing case mix in the period January 1, 2024, through December 31, 2024, using the 2024 CMS PDPM index and pursuant to 101 CMR 206.04, 101 CMR 206.05, 101 CMR 206.06(2) through (14), and 101 CMR 206.12(4); (b) determine 112% of the facility’s average per diem rate that was in effect on September 30, 2025, calculated using the facility’s average PDPM nursing case mix in the period January 1, 2024, through December 31, 2024, using the 2022 CMS PDPM index; (c) subtract the amount calculated in 101 CMR 206.06(15)(a) from the amount calculated in 101 CMR 206.06(15)(b).; (d) divide the amount calculated in 101 CMR 206.06(15)(c) by the amount calculated in 101 CMR 206.06(15)(a).; (e) the percentage calculated in 101 CMR 206.06(15)(d) will be applied as a downward adjustment to the total proposed standard nursing facility per diem rate, as established through 101 CMR 206.04, 101 CMR 206.05, 101 CMR 206.06(2) through (14), and 101 CMR 206.12(4), at each PDPM nursing case mix category.