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Rhode Island Price-Based System Postponed

May 07, 2013

Monica A. Motta, CPA, Principal
Sullivan & Company, a Division of BlumShapiro

After the initial test of the progress of the implementation of the Price-Based System, affecting nursing homes in Rhode Island, the Office of Health and Human Services (OHHS) has agreed to postpone the implementation date to June 1,2013.

Three providers out of the current 84 were selected by OHHS as a test to determine whether the new system will process claims and pay providers the correct amount on a monthly basis.  The result of this test demonstrated that the system was not ready for implementation. 

The delay in implementation will also give the long-term care industry time to discuss with the Department of Human Services another potential problem.

As an independent test, we sampled 12 client/providers to calculate each provider’s average Case Mix Index (CMI) in 2013 compared to their average CMI as of the last assessment date.  The average CMI for the 12 providers sampled, as of the last assessment reference date, as calculated by the State was 1.0.  The average CMI for these same 12 providers in 2013 had decreased to .95.  This decrease in average CMI will result in a decrease in Medicaid revenue of approximately $1,600,000.  If these 12 providers sampled are representative of the industry, the lost Medicaid revenue would be approximately $11 million dollars per year. 

This is an industry problem which will be best handled by the two associations.  However, each provider should take the time offered by the delay to re-examine their processes.   Following are some items you should take into consideration during this time:


Business Office/Administration

  • Internal Analysis
    • Review 2013 CMI on your current residents and determine the impact on your current Medicaid rate.
  • Communication
    • Communicate unexpected and “radical” results to the associations.  If you are not a member of an association, we can communicate this information for you.


  • Documentation
    • Know what sections of the Minimum Data Set (MDS) directly impact payment
    • Implement a mechanism that flags a resident’s upcoming assessment seven days prior
    • Take credit for what you do:
      • Question changes from the last evaluation
      • Educate your staff to include all care items in a patient chart
  • New Admissions
    • Timely completion of the initial evaluation is critical to a timely payment

Administration and Nursing

  • Attend our webinar, Wednesday, June 5, 2013:
    • We will be hosting a webinar with Kelly Leighton of HP concerning processing of claims.  You will receive an invitation to sign up for the event, as well as submit questions ahead of time in the next few days.

Post June 1

  • It will be extremely important to review your remittance advice for accuracy.
    • Are all Medicaid patients and days included? 
    • Are the days and RUG rates correct?
    • Any days paid at the default rate should be reviewed for accuracy.
    • Identify any suspended claims:
      • Reason for suspension
      • How to resolve

There are currently many unanswered questions surrounding this topic, however, the action items listed above should give your organization a good starting point. We will be sure to communicate changes as they occur or as information becomes available, however, please feel free to contact me at with any additional questions.


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