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NYS NHQI Payments set to be released – Part 1

By Robert Nasso, on September 10th, 2018

$250 million of NYS Medicaid funds are about to be redistributed as the Department of Health (DOH) will be releasing the Quality Initiative payments for 2013 through 2017. This massive reallocation of dollars coupled with an additional 2% penalty for poorer performing facilities has really upped the ante for evaluating your quality metrics. With so much money at stake, now is a good time to revisit the major components of the initiative.

The NHQI (formerly referred to as the Quality Pool) was established with the 2010-2011 State legislative budget and slated for implementation for the 2013 calendar year. Unfortunately, no new funds were added to the program. The program was budget neutral whereby a $50 million dollar pool was funded by poorer performing nursing facilities. Shortly after its implementation, a group of negatively impacted facilities initiated a lawsuit against the State. The courts recently issued a decision that appears to favor the State and has paved the way for the release of the funds.

How does the program work?
The intent of the program is to incentivize Medicaid certified nursing facilities to improve the quality of care of their residents and to reward facilities for quality based on their performance. Only non-specialty nursing facilities are eligible. DOH established a set of measures to evaluate the performance of facilities. The State established a quintile system whereby facilities would be divided into quintiles based on their performance, with the 1st quintile being the top performers and the 5th quintile being the worst performing facilities.

The NHQI scorecard is divided into three components:

  1. The Quality Component (quality measures) – 70 points
  2. The Compliance Component (compliance with reporting ) – 20 points
  3. The Efficiency Component (potentially avoidable hospitalizations) – 10 points

As you can see, the total maximum number of points is 100. Facilities are evaluated based on their performance relative to all the other facilities in the state. It’s a zero sum game whereby there will always be 20% of the facilities that will be top performers and 20% that will be the worst performers.

The Quality Component Score is derived from 14 different quality measures worth 5 points each. The measures are primarily extracted from nursing home assessments completed (MDS) submitted in the previous year. Other measures included are nursing staffing, percent of agency staff and resident vaccinations. Facilities are rewarded both for performance as well as improvement.

The Compliance Component Score is calculated based on three items – a facility’s 5 Star rating adjusted for their region, the facility’s timely submission of their annual cost report and the facility’s timely submission of employee vaccination data.

Lastly, the Efficiency Component is based on a facility’s performance relative to Potentially Avoidable Hospitalizations (PAH) that are risk adjusted. Facilities are ranked from low to high – top 20% receive 10 points, bottom 20% receive zero points.

What is the measurement period?
Much of the data used in the current year is derived from the previous year. For example, the 2018 NHQI is set to be released later this year – December 2018. The Quality Component Score is primarily pulled from 2017 information (resident assessments, cost reported staffing numbers, etc.). The 2018 Compliance Score uses 5 Star ratings reported as of April 1, 2018, which is 9 months old or longer and cost report compliance for the 2017 year. The 2018 Efficiency Score will use MDS data and SPARCS data from 2017. As you can see, the quality metrics that drive the current scores are somewhat dated.

How is the award calculated?
The points are calculated for each facility and they’re ranked from high to low with the top 20% of facilities in Quintile 1 and the bottom 20% in Quintile 5. The allocation of dollars roughly come out as follows:

  • Quintile 1 – Award of 1.00% of Medicaid rate ($1.70 to $3.00 per Medicaid day)
  • Quintile 2 – Award of 0.56% of Medicaid rate ($0.80 to $1.70 per Medicaid day)
  • Quintile 3 – Award of 0.12% of Medicaid rate ($0.20 to $0.40 per Medicaid day)
  • Quintile 4 and 5 – Penalty of 0.77% of Medicaid rate ($1.30 to $2.30 per Medicaid day)

Next Steps
The pending release of the NHQI dollars provides opportunities for all facilities. Lower ranking facilities, can gain simply by improving from their current position. Stay tuned for Part 2 of our NHQI series. Part 2 of the series will focus on strategies that facilities may consider in improving their quality rankings. If you have any questions please email me at, or call 585-200-5151.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.

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Written By

Rob Nasso April 2020
Robert Nasso
Senior Counsel

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