Division of Rate Setting

Average # of days it takes to issue a special rate memo once external paperwork has been received

33.5SFQ1 2021

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Notes on Methodology

Once the Division of Rate Setting (DRS) receives a completed application for a new nursing home special rate from the Department of Aging and Independent Living (DAIL), Department of Mental Health (DMH) or Department of Corrections (DOC), DRS’s target is to set the rate and send the rate memo to DXC and provider within ten business days of the receipt of the completed application.

  • Nursing Home Providers
  • DVHA signatories
  • Department of Aging and Independent Living (DAIL)
  • Department of Mental Health (DMH)
  • Department of Corrections (DOC)
Story Behind the Curve

In addition to setting regular Medicaid per diem rates for its 35 Vermont nursing facilities, DRS also sets three types of special individualized rates for individuals who qualify:

Section 14.1 Rates:  In exceptional circumstances, special Medicaid rates are available for individuals whose unique physical conditions make it otherwise extremely difficult to obtain appropriate long-term care.  DVHA’s Commissioner and Medical Director must approve the individual’s care needs meet the requirements and that the proposed placement is appropriate.  DRS, the Commissioner of DVHA and the Commissioner of DAIL must determine that the rate, which is based on budgeted allowable costs, is reasonable for the services provided.  A plan of care must be approved by DAIL and DVHA’s Medical Director.

Section 14.2 Rates:  A special rate is available for residents with atypically severe behavioral needs who are transferred directly from the Vermont State Hospital or from a similar situation.  This rate is an incentive payment in addition to the facility’s current per diem rate.  The Commissioner of DMH must approve an individual’s eligibility, and Commissioner of DMH and the Division of Licensing and Protection must approve a plan of care for the individual.
Section 14.3 Rates:  A special rate equal to 150% of the nursing facility’s ordinary Medicaid rate is paid for care provided to eligible Medicaid furloughees of the Department of Corrections (DOC).

These three types of special rates exist to compensate nursing facilities for their increased costs and/or risk of taking these three types of exceptional residents close to the time that services are provided.  Without the special rates, any additional costs would be rolled in with the facilities’ other costs and included in the normal rate-setting process.  It may take up to four years for these costs to be reflected in their per diem rate as there is a lag between when costs are incurred in a base year costs and when they are reflected in the per diem rate.  Due to this, many nursing homes will only decide to accept special rate residents once the special rate has been set. 

In order to minimize the time a resident has to stay in a hospital or in other difficult placements, DRS strives to set the special rate and send a signed-off rate memo to DXC and the provider within ten business days once DRS receives the complete set of required documentation from the provider and applicable placement agency partner at the State of Vermont.

There are two specialty units in Vermont that accept specific types of residents for which they receive Section 14.1 special rates: a ventilator unit at the Pines at Rutland and a Huntington’s Disease unit at Crescent Manor in Bennington.  These facilities provide critical specialized services for these specific populations in Vermont so that Vermonters can reside in-state, closer to their families as an alternative to out-of-state placement.

Starting in early 2018, DRS set 14.2 special rates for 38 individuals at three nursing facilities in the Northeast Kingdom who accept residents with severe behaviors that no other Vermont nursing facilities will accept.  These facilities serve a critical need in Vermont for caring for these otherwise difficult to place residents. 

There are currently no Section 14.3 residents on special rates.  DRS understands from DOC that it is challenging to find facilities that are a good match and will accept furloughees.

Due to the heightened needs of the patients that these special rates serve, it is important that the special rates are set in a timely manner in order to assure that these nursing facilities remain financially sound and are able to continue to serve this population.

Last updated 10/15/2020


Special rates are essential in placing some of Vermont’s most challenging-to-place residents in in-state nursing facilities.  DRS will continue to prioritize setting these special rates in a timely manner so that there are no delays in placement.  Challenges that DRS faces in meeting the tenday target include obtaining the required DVHA signatures on the rate memo in a timely manner as well as balancing this work with DRS’s other responsibilities.

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