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Agreements Assessing Costs to Participating Counties Attributable to Purchase of Service Contract for Particular Medicaid Patients, However, Are Not Permissible
MADISON - Responding to an inquiry from Department of Health Services Secretary Karen Timberlake, Attorney General J.B. Van Hollen today issued a formal opinion concerning joint county funding and operation of nursing homes in connection with the Medicaid program. Van Hollen concluded in his opinion that "counties may enter into joint agreements to collectively furnish and fund nursing home services if the agreements do not violate federal and state Medicaid statutes and regulations prohibiting supplementation."
Assessments placed on counties to fund the provision of services, however, is a significant component to an agreement's legality. "Assessments resulting from such agreements that are computed without reference to and that are not attributable to purchase of services contracts involving Medicaid patients would not constitute [unlawful] supplementation," Van Hollen wrote. However, "[a]ssessments that are computed with reference to or are attributable to purchase of services contracts involving particular Medicaid patients are not permissible." Van Hollen concluded that the validity of hybrid assessments that do not fit solely within either one of those two categories must be determined on a case-by-case basis.
Van Hollen's formal opinion was in response to a request by Karen Timberlake, Secretary of the Department of Health Services. Secretary Timberlake advised Van Hollen that a group of counties intends to form a commission to lease an existing county nursing home facility. Timberlake indicated that her Department would license the commission as a Medicaid provider and that all of the counties that currently have patients in the facility would voluntarily become members of the commission. Most of these patients are Medicaid patients. Timberlake also advised Van Hollen that the commission intends to issue assessments against all member counties and that such assessments would be used to defray all of the costs of operation of the nursing home facility.
Nursing homes that accept Medicaid patients must accept the rates established by the Medicaid program for treating individual patients, whether or not those rates fully compensate the provider for the costs of providing those services. Timberlake asked Van Hollen if assessments against member counties would violate various federal and state Medicaid statutes and regulations that prohibit a nursing home from attempting to obtain payments in addition to the payments that the nursing home receives from the Medicaid program for treating individual patients. The practice of attempting to obtain payments in addition to those received from the Medicaid program is referred to as "supplementation."