HB401 Alabama 2020 Session

Summary

Primary Sponsor

Steve ClouseRepresentative

Republican

Session

Regular Session 2020

Title

Privilege assessments, assessment increased, methodology for recalculation of assets provided, quality incentive program for nursing facilities, Secs. 40-26B-21, 40-26B-26, 40-26B-27 am'd.

Summary

HB401 raises nursing facility funding through higher privilege assessments, updates asset-based rate calculations, and creates a Medicaid quality incentive program in Alabama.

What This Bill Does

Raises the base privilege assessment per nursing facility bed starting Sep 1, 2020 and blends a new annual increment into the existing assessment, with the total per-bed rate included in Medicaid per diem rates starting Oct 1, 2020. Establishes supplemental and secondary supplemental privilege assessments with specific per-bed amounts and monthly surcharges through 2022, also treated as allowable costs and included in Medicaid rates. Recalculates each facility's current asset value by adding 41.03% of the June 30, 2020 rebasing for rate calculations, with rate increases effective Oct 1, 2020. Creates a Medicaid quality incentive program with at least $5 million per scoring year, using CMS quality measures and NRC Health customer satisfaction data to award lump-sum incentives; payout timing and eligibility are defined, with first scoring year 2020-2021. The bill also allows a special reimbursement model for ventilator units and potential enhanced reimbursement for rural hospital-connected nursing facilities if federal funding is available; and specifies that the act may be void if federal participation is not available.

Who It Affects

• Nursing facilities in Alabama — will pay higher base, supplemental, and secondary supplemental privilege assessments, which are included in Medicaid per diem rates and may affect operating finances.
• Alabama Medicaid Agency and Medicaid-reimbursed facilities — must calculate and adjust per diem rates under the new assessment structure and asset-value recalculation, and administer the quality incentive program.
• Rural hospital-connected nursing facilities — may receive enhanced reimbursements when federal participation is available.
• Nursing facility residents and the general public — may experience changes in Medicaid payments and facility quality incentives that could influence care and funding.

Key Provisions

• Increase base privilege assessment: per-bed rate rises from $1,899.96 to $2,227.44 (adding $327.48) starting Sep 1, 2020, with the addition paid in monthly installments and included in Medicaid per diem rates beginning Oct 1, 2020.
• Supplemental and secondary assessments: implement a supplemental privilege assessment (Sept 1, 2010 through Aug 31, 2022) with specified per-bed amounts and monthly surcharges (initial $131.25, later reduced to $43.75), plus a secondary supplemental assessment ($401.28 per bed annually) payable monthly from Oct 1, 2015 through Aug 31, 2022.
• Cost inclusion and rate adjustment: total privilege assessments and surcharges are allowable costs and included in Medicaid per diem calculations; adjustments to cost ceilings are provided to ensure total privilege assessments are treated appropriately for rate-setting.
• Asset value recalculation: for cost reporting year beginning July 1, 2020, current asset value used in rate calculations is increased by 41.03% of the June 30, 2020 rebasing; rate increases apply to services starting Oct 1, 2020 (not before).
• Ventilator unit reimbursement: authorizes a special reimbursement model for enhanced care in dedicated ventilator units with specific facility requirements.
• Quality incentive program: creates a quality incentive fund of at least $5,000,000 per scoring year; uses five CMS MDS quality measures and three NRC Health customer-satisfaction categories; facilities earn points by improving or ranking at/above national averages, with lump-sum payouts by Feb 1 after each scoring year (first year 2020-2021).
• Severability and funding availability: the act is severable and may be of no effect if federal participation under Title XIX is not available; other sections eligible for federal participation remain in effect.
• Effective date: act becomes effective immediately upon passage and approval.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Nursing Facilities