The Medicaid Rate Setting Unit has completed its calculation of the reasonableness limits that will be used in generating Medicaid rates effective July 1, 2004. The most startling result is the miniscule increase in the reasonable hourly limit for Aides. Although the RN limit increased by 6.2% and the LPN limit increased by 6.5%, the Aides limit increased by less than 1%.

The Other Administrative limit showed a significant increase of 8.5%. This is the category in which liability insurance is reported. Other General Services (landscaping, waste management, security, pest control and related areas) increased by 16%. The only decrease was in the area of non-legend drugs.

Average facility occupancy remained at 91% which was the same as last year.

The inflation add-on that will be used in developing July 1, 2004, rates is 2.81%. This is somewhat higher than the July 1, 2003, add-on which was 2.42%. Medicaid uses indices that are not specific to health care in developing the inflation add-on which is why this factor is so much lower than the actual cost increases experienced by the industry.

For assistance in Medicaid cost reporting and reimbursement issues, contact Health Care Resources.

 

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