HELENA, Mont. (AP) — Montana Gov. Steve Bullock's administration is complying with a judge's order to temporarily reinstate previous Medicaid reimbursement rates for nursing homes and assisted-living facilities but will staunchly defend the rate cut made by the state health department, the governor's budget director said Monday.
State Budget Director Dan Villa said the state Department of Public Health and Human Services is notifying the nursing facilities and others that provide services to Medicaid patients of the change after a Helena judge last week temporarily blocked the rate cut made by the department in January.
Villa, speaking to state lawmakers on the Legislative Finance Committee, said he hopes to resolve the lawsuit quickly because of the potential cost to the state.
"Certainly, the state will vigorously defend Montana taxpayers from this lawsuit," he said.
The lawsuit by the Montana Health Care Association and nursing facility owners challenges the health department's decision to reduce Medicaid provider reimbursement rates by 2.99 percent to an average of $181.57 per patient, per day, as a part of statewide spending cuts to fill a budget shortfall.
District Judge James Reynolds last week ordered the state to temporarily reinstate the $187.17 rate that was in place before the cuts at least until a July 11 hearing in the lawsuit. The rate difference can be more than $100,000 a year to nursing homes that care for dozens of Medicaid patients.
The lawsuit alleges the department's rate cut violates state law because health officials did not show a "reasonable necessity" for them, explain how they were formulated or allow the public to fully participate in the decision.
Their lawsuit also claims the cuts should be invalidated because they conflict with a state law that raised a bed fee paid by nursing homes.
Villa said the Bullock administration is still formulating a strategy to respond to the lawsuit, but he said nursing homes pay the bed fee as a way to increase the amount the U.S. government pays in matching funds.
It's illegal for that bed rate tax to go toward anything other than increasing provider reimbursement rates, but the state is using the bed fee increase to fill its budget hole, the nursing homes say.
The law says the fee must be used to raise the Medicaid reimbursement rates in the 2018 financial year, which ends June 30, above the rates for the 2017 financial year.
Villa told the finance committee that the state is in compliance with the law because even with the 2.99 percent cuts, providers are still reimbursed more than they were a year ago.
The health department also issued a notice that it plans to increase Medicaid provider rates next year to about $196 per patient, per day, he added.
"I think it is important for everybody to understand the numbers involved," Villa said.
Montana Health Care Association executive director Rose Hughes did not immediately return a call for comment.