A.(1) The current methodology for reimbursement of services to Medicaid recipients provided by nursing homes was implemented in 1984 prior to major changes in federal laws relative to nursing home staffing, provision of patient care, enforcement, and regulatory requirements.
(2) The current methodology did not anticipate changes in Medicare and other health insurance programs that have resulted in patients with more complex medical problems being discharged to nursing homes.
(3) The current methodology provides a disincentive for capital formation to maintain and update physical plants of nursing homes and provides a disincentive to admit patients with high care needs.
(4) The legislature finds that a number of state Medicaid programs have adopted case mix reimbursement systems which factor into nursing homes' rates the care level and resource needs of the patients receiving services.
(5) The legislature further finds that a rental system for reimbursing capital costs would encourage investment in the renovation and replacement of nursing homes, creating a more homelike environment and better quality of life for the patients.
B. The purpose of this Chapter is to change the reimbursement methodology for nursing homes' services reimbursed through the Medicaid program to ensure that nursing homes are paid a rate that is reasonable and adequate.