FY25 Medicaid Reimbursement Rate Updates

Increased reimbursement rates will go into effect for RI Medicaid across all covered providers and services on October 1, 2024, in response to recommendations from the RI Office of the Health Insurance Commissioner (OHIC).  

Click here to view the latest OHIC rate review minimum fee schedule for managed care--updated as of December 11, 2024.

The scheduled rate increase is set to be the largest in the program’s history and requires a great deal of coordination between the State, federal partners, managed care organizations, and providers to successfully implement. The following workstreams must make a series of updates prior to these new rates going live. 

• Policy Updates: Medicaid policy staff must identity every service’s authorization as either in the State Plan or the Section 1115 Waiver.  The location of each service dictates the steps necessary to seek federal approval.  
  • State Plan Amendments: State plan amendments (SPAs) first must go through a 30-day public comment period before they can be submitted to CMS for review and approval. EOHHS must complete a submission package for CMS which includes public and tribal notices, revised state plan pages, a fiscal impact summary, and funding questions. Once submitted, CMS has 90 days to review the amendments or request additional information. At this time the 90-day clock is stopped, and the state works with CMS to answer any questions. The approval from CMS is retroactive to the effective date submitted with the SPA.  
  • CMS Waivers: All waiver changes must be sent to the Centers for Medicare and Medicaid Services (CMS) via email and include a full description of the proposed change by service, procedure code, and a comparison of current vs. proposed rates. 
• Finance Updates: Medicaid Finance staff must prepare an updated fee schedule for every code and modifier combination affected by the Enacted Budget. This includes error-checking, identifying codes necessary for a managed care minimum fee schedule, cross-referencing fee-for-service billing codes with MCO billing codes, and preparing the rate sheet so that it contains all the information necessary to update the Medicaid Management Information System (MMIS), which is the system that processes payments for any Medicaid claims submitted according to the update fee schedule.   
• MCO Management and Oversight Updates: The managed care oversight team must amend contracts to reflect updated rates and direct MCOs to update their provider amendments with the changes. MCOs have 45 days to review proposed contract changes and submit questions and concerns to EOHHS. Once the amended contract is fully executed, the MCOs have 90 days to implement all changes. Implementation may include renegotiating changes to provider contracts, updating computer and billing systems and ensuring that providers are paid correctly under their new agreements. MCO subcontractors must also be compliant with the changes.  

The FY25 Enacted Budget includes a 14.5% increase to the fee-for-service direct, other direct, and indirect components of the nursing facility per diem. Facilities will be contacted via email in mid to late-September with the new 10/1/2024 rates. The rates are available on our website here. 

EOHHS already has the requisite State Plan Authority to implement the SFY 25 Enacted rate increases; therefore, no State Plan Amendment is needed. Medicaid Finance staff must manually update all components of the nursing facility per diem. Then, the rates are shared with the Medicaid Management Information System (MMIS) vendor to update our billing system to pay at the new rates. 

The Rhode Island Certified Community Behavioral Health Clinic (CCBHC) demonstration launched on October 1, 2024, with eight providers offering services in this capacity. 

• Rates for Year 1 were communicated to Managed Care Organizations (MCOs) by week of August 26 (initial rates were provided in early July). 
• MCO and provider system testing began on August 13. MCO attestation of successful completion of testing with providers and confirmation of readiness for billing was due to the state by August 27. MCO internal and mock provider testing was successful, with no issues reported. 
• Contracts between MCOs and CCBHC providers were under final review with providers, with fully executed contracts due to the state by August 28. Fully executed contracts between CCBHCs and Designated Collaborating Organizations (DCOs) were also due to the state on August 28. 
• On August 30, EOHHS provided final approval for providers to go-live on October 1.

Rates

Posted below are the State approved Prospective Payment System (PPS)rates per provider for Demonstration Year (DY) 1 of the Certified Community Behavioral Health Clinic (CCBHC) Program. These rates are effective October 1, 2024, through September 30, 2025. 

Rhode Island Medicaid CCBHC PPS-2 Rates* 
Effective Date: October 1, 2024 

 *Rates exclude payments subject to outlier payment threshold. 

Background 

In the State’s Fiscal Year (SFY) 2023 Enacted budget, EOHHS was directed by the General Assembly to implement the federal CCBHC model in Rhode Island using the Centers for Medicare and Medicaid Services (CMS) PPS rate methodology. Details of the rate methodology can be found in the appendix of this document starting on page 94.  

 Consistent with this directive, EOHHS and Medicaid implemented the PPS-2 rate setting methodology to reimburse providers through a provider-specific bundled monthly payment that reflects each provider’s projected service delivery costs. The PPS-2 allows States to develop separate population-specific rates that reflect the variable cost of care for individuals with certain clinical conditions, i.e., adults with high acuity care needs, youth with high acuity care needs, and individuals with a substance use disorder (SUD); in contrast to a client receiving general outpatient services.  

 To determine the DY1 PPS-2 rates, providers submitted estimates of their CCBHC-allowable costs and expected visits using the CMS PPS cost report templates, as is required by the SAMHSA for participation in the Demonstration Program. The CCBHC Interagency Team, inclusive of staff and contractors across BHDDH, DCYF, and Medicaid, and with assistance from its actuarial partner Milliman, then reviewed each provider’s staffing plans and Cost Report submissions, provided feedback on the reasonableness of the estimates, and approved final Cost Reports and rates per provider. 

 As demonstrated in the posted PPS-2 rates, the rates can vary considerably across providers, as they are based on each CCBHC’s reported estimated costs, expected service volume, and mix of clients across the populations that expectantly have different utilization needs. Each provider’s cost profile reflects many variables, including: 

• the size of the organization (and whether its CCBHC services represent a part of a broader service array or a larger health system), 
• the acuity of the populations it serves, 
• its proposed staffing ratios for critical services, 
• desired salary compositions, 
• expected ramp-up costs, 
• anticipated monthly encounters, and 
• its federally approved indirect rate. 

 EOHHS is committed to responsibly funding the actual Medicaid-associated costs of an efficiently run CCBHC and as such the State expects to monitor the appropriateness of the current PPS-2 rates relative to the actual costs incurred by each provider and their adherence to the staff compositions committed to by the providers and the standards set forth by the State. As such the DY 1 rates will be updated prospectively through an annual rate setting process that will consider the need for a full rebasing using more recent expenditure data or reasonability of simply applying the annual inflationary adjustment factor as set forth by CMS. 

Click here to learn more about the CCBHC initiative in Rhode Island.  

The FY25 Enacted Budget included rate increases and fee-for-service billing modernization for SUD Residential providers. Facilities will be contacted via email with additional guidance on the changes.  

Click here for Guidance Issued 9/23/2024