MassHealth Fact Sheet – FY10 H.1 
Nursing Facilities

Overview 

In FY10, MassHealth spending on nursing facility services is projected to decline by 2-4% and 
utilization (days) is projected to decline by 4-5%. The acuity (casemix) of MassHealth members 
has remained relatively stable and is expected to increase slightly in FY10. In FY10, MassHealth 
is investing in a modest rate increase for nursing facilities, while incorporating payment incentives 
to promote high quality and cost effective care.  

FY10 Policy Initiatives

Rate Increase - $15M Investment
MassHealth will increase nursing facility rates by $15M in FY10. Nursing facility rates will not be 
rebased in FY10.  Budget language authorizes EOHHS to establish rates using the costs of any 
year determined to be appropriate. 

Pay-For-Performance – (P4P) $35M 
MassHealth will make payments of $35M in FY10 for facility performance in FY09, pursuant to 
MassHealth’s new nursing facility P4P Program.

User Fee - $75M Revenue Increase
The nursing facility user fee is an assessment on nursing facilities based on certain reimbursed 
patient days. The nursing facility assessment currently totals $145 million. H.1 proposes to 
increase the assessment by $75 million (increasing the total aggregate assessment to $220 
million), which will be directed to avoid a significant rate decrease, fund a $15 million increase, 
and fund performance-based payments. Outside section language authorizes DHCFP to 
implement this provision. 

Payment Reforms
MassHealth is exploring alternative payment approaches and will engage in discussions with 
nursing facilities regarding payment reforms and administrative efficiencies including streamlining 
the Management Minute Questionnaire (MMQ)  process.