New Medicaid "Bed Hold" Payment Rules in Tennessee Effective
August 1, 2005

Earlier this week many nursing home residents and their families received a letter from TennCare/Medicaid (dated July 1), which notes that starting July 31 Medicaid will no longer pay for "bed hold days" at Tennessee nursing homes.  Historically, Tennessee Medicaid has paid a nursing home with an occupancy of 85% or more to hold a Medicaid resident's bed while the resident is in the hospital, up to 15 days per occasion, and up to 18 days per year for a therapeutic absence.  A reversal of this policy will not only affect nursing homes which receive Medicaid funding while a resident is out of the facility for hospital or therapeutic reasons, but may also affect hospitals which accept those transferred residents, especially from a high-occupancy nursing home which might not otherwise have an empty bed to re-admit the resident after the hospitalization.

There has been some confusion about this issue among providers, and many long term care providers initially believed the letters were mailed by mistake.  However, it now appears the letters were not mailed by mistake, as in addition to the mailing of the letters last Friday, also on July 1 the Tennessee Secretary of State published the new rules which spells out this change (the applicable portion is the addition of new subparagraph 3, and the entire subsection, with new subparagraph 3, is reproduced below—The entire rule can be found at:   http://www.state.tn.us/sos/rules/1200/1200-13/1200-13.htm).

The new rules contain a note that says "Public Necessity rule 1200-13-1-.03 and 1200-13-1-.06 filed July 1, 2005; effective through December 13, 2005."  "Public Necessity" rules allow a State agency to circumvent normal rule-making procedures and have a rule become effective immediately upon its filing with the Secretary of State or within a period of time less than what is required under normal rulemaking procedures.  However, such rules are temporary, and can last no more that 165 days (thus the December 13, 2005 expiration date referenced in the note above).  During that 165 day period the State agency will usually go through the normal rulemaking procedures, which allow for public notice and comment, and a public hearing.

Although providers are still trying to assess exactly what this rule change means to them, whether temporary or permanent, we wanted to bring it to your attention, as it may affect admissions and discharges for both nursing homes and hospitals.   Providers may also want to review their existing transfer agreements.  Since many of the transfer agreements between nursing homes and hospitals were drafted when payment for "bed hold days" for Medicaid residents was the rule, this change may affect, and require amendment to, some of those transfer agreements.

If you have any questions please contact Mike Brent at 615-252-2361, or another member of the Boult Cummings Health Care Team.