EXECUTIVE SUMMARY

The Health Care Quality Surcharge (HCQS) was created by Senate Bill 246 (SB246) in the 2019 Regular Legislative Session. The program imposes a daily surcharge on certain types of Facilities, including Nursing Facilities (NF) and Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICF/IID), for non-Medicare bed days. The purpose of the surcharge is to increase each Facility’s Medicaid reimbursement rates by at least the rate of nursing home inflation and to provide bonus payments to Medicaid Certified Nursing Facilities based on performance data.

FUNDING MECHANISM AND PAYMENT ARRANGEMENT

The Health Care Quality Surcharge (HCQS) Value-Based Payment (VBP) Program (“the program”) is funded through a provider surcharge, a general fund allocation, and a Medicaid Managed Care State Directed Payment (SDP) payment arrangement of the Value-Based Payment (VBP) type to promote increased access to care and improved quality outcomes for Medicaid beneficiaries. Through this payment arrangement, the Managed Care Organizations (MCOs) make specific payments to healthcare providers, as directed by the Health Care Authority (HCA).