Issue Background

Support Passage of a Prospective Payment Reimbursement System

FHCA supports the state's move to a Prospective Payment System (PPS) for nursing center care delivery with the following parameters:

  • Direct/Indirect Floors to cap the amount of profits and ensure funding is used to enhance quality.
  • Cost Shifts with the greatest impact included in the Direct Care Component.
  • Quality Threshold (20th Percentile) / Quality Funds (6%) with a clear incentive for strides in quality.
  • Modernized Fair Rental Value System (FRVS Fully Funded) to incentivize and adequately reimburse providers for renovations and replacements.
  • Transition Period with Funding Enhancement  ($70 million [$10 million GR]) - a five-year transition period with new funding to cover losses of those centers facing reimbursement reductions.
  • Ventilator Payments ($200/day)


Florida nursing centers are reimbursed using a cost-based system, which does not work in a managed care environment, lacks budget predictability for providers and the state and has lengthy audit and appeal timelines with no ability for centers to recoup care delivery costs that were underpaid by the state.

FHCA supports a Prospective Payment System (PPS) which measures and rewards centers for meaningful quality advancements and provides incentives for efficient use of taxpayer dollars. FHCA is asking legislators to support the FHCA PPS Model, which links quality improvements to payments and protects nursing centers experiencing funding reductions under the new payment structure.

The FHCA PPS Model includes a clear incentive for making quality improvements, with 6 percent of total funding paid on the basis of achieving quality measures. “Floors” are included to serve as a cap for the amount of profits providers can earn, as well as ensure funding is used to enhance quality through the Direct (staffing) and Indirect Care (i.e. therapy, dietary) rate components.   

Cost mapping must be updated to move: a) all therapy and dietary costs to Direct Care; b) complex medical equipment, medical supplies and other allowable ancillary cost centers to Indirect Care, and c) medical records to the Operating component.

The FHCA PPS Model incentivizes and adequately reimburses providers for renovations and replacements consistent with what they would rebuild today to meet senior-care demands.

FHCA’s PPS Model also includes a five-year transition period and an additional $10 million of General Revenue, combined with the Nursing Home Quality Assessment and federal matching funds, to yield $70 million. These funds would be directed as special payments over a three-year period for holding harmless those centers experiencing rate reductions under the new system.

Download the Issue Brief.


Watch the Feb. 15, 2017 House Health Care Appropriations Subcommittee meeting.