Governor McAuliffe Announces Budget Intentions – No Changes in Nursing Facility Funding Enhancements Reported Last Week

Governor Terry McAuliffe announced his intentions for the recently passed Biennial Budget this morning.  Most important for our membership, the Governor announced his intention to sign the Budget into law, with no indication of changes to the General Assembly-passed provisions related to Medicaid funding of nursing facility care.  In his announcement, the Governor indicated staff were not yet finished and that more potential amendments/vetoes could be submitted, but as stated above, there is no indication that nursing facility payment changes or funding are in jeopardy – we will continue to monitor this as the full list of the Governor’s actions are formally submitted in the next couple days, and if any subsequent legal actions may impact provisions of the budget.

As you will recall from this publication last week, the General Assembly funded rebasing and inflation of Medicaid nursing facility rates, under the new price-based reimbursement system, effective July 1, 2014.  The General Assembly removed the additional inflation adjustment for SFY 2016 (beginning July 2015) and accelerated the reduction in the FRV rental rate floor to 8.0 percent by making it fully effective July 1, 2014.  In summary, the new budget contains nearly 85 percent of the new funding that had previously been expected for 2015.  We all clearly have work ahead of us next year to fight for this lost funding for SFY 2016.

Among a handful of line item vetoes announced, the Governor indicated his intention to veto two items relevant to the Medicaid expansion conversation: the Medicaid Innovation and Reform Commission (the MIRC) and the language added prohibiting the Governor from proceeding with an expansion without action by the General Assembly.  These vetoes, as well as at least five other vetoes unrelated to Medicaid (and any other amendments/vetoes not yet announced) will be before the General Assembly next week.