LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 2920
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: SEPTEMBER 11, 2024
SUMMARY
Synopsis: Requires parity in Medicaid reimbursement rates for certain routine
inpatient hospice room and board services.
Type of Impact: Annual increase in State expenditures and revenue.
Agencies Affected: Department of Human Services.
Office of Legislative Services Estimate
Fiscal Impact Annual
State Expenditure Increase $116,000 - $161,000
State Revenue Increase $60,000 - $83,000
 The Office of Legislative Services (OLS) estimates that gross State Medicaid expenditures will
increase between $116,000 and $161,000 annually due to increased Medicaid reimbursement
for room and board services provided in licensed hospice care programs’ inpatient units.
 The OLS further estimates that State revenues, in the form of federal reimbursements for State
Medicaid expenditures on hospice services, will increase between $60,000 and $83,000
annually under the bill. Therefore, the bill’s annual net State cost is projected to range from
$56,000 to $78,000.
BILL DESCRIPTION
The bill requires that the Medicaid reimbursement rate for room and board services provided
in a licensed hospice care program’s inpatient unit be equal to the Medicaid reimbursement rate
for nursing home room and board services provided to beneficiaries who are receiving hospice
services within nursing homes. The reimbursement rate provided under the bill will not apply to
hospice care provided in a patient’s home or to inpatient care received by a hospice patient for the
purpose of respite services, symptom management, or pain control.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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For patients admitted to a licensed hospice care program’s inpatient unit, the reimbursement
rate provided under the bill will apply to days when the patient receives a routine level of care
from the hospice care program, as well as to any days during which the patient is no longer
receiving services from the hospice care program but continues to reside within the program’s
inpatient unit pending transfer to another facility.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
Although the federal Medicare program pays for most hospice care delivered across the United
States, Medicaid covers certain hospice recipients and services not covered by Medicare. NJ
FamilyCare, the State’s Medicaid program, covers most of the same hospice benefits as Medicare
and generally pays for nursing care, medical equipment and supplies, medications, home health
aides, and other services provided to hospice patients. NJ FamilyCare reimburses hospice care on
a per-diem basis that varies according to the type and intensity of services provided, including
lower-intensity “routine home care” provided to stable patients in private homes or other
residential settings. Unlike Medicare, however, NJ FamilyCare also covers certain room and board
costs for beneficiaries who reside in nursing facilities and who elect to receive hospice services.
Federal law requires that the Medicaid room and board rate for a hospice patient residing in a
nursing home must be at least 95 percent of the regular Medicaid per-diem reimbursement rate for
that nursing home.
NJ FamilyCare does not currently reimburse room and board costs for hospice patients residing
within inpatient hospice facilities. Information provided by the Home Care & Hospice Association
of New Jersey indicates that, as of June 2024, NJ FamilyCare members receiving hospice services
within inpatient hospice facilities generally only qualify for a Medicaid per-diem rate of $89.50,
which covers assisted living facility supportive services but not other room and board costs. This
bill would increase inpatient hospice facility reimbursement rates to the level of Medicaid per-
diem rates for hospice room and board services within nursing homes, which the OLS estimates
would yield a per-diem rate of $258.27 based on 95 percent of NJ FamilyCare’s average nursing
home rate in FY 2024 when excluding specialized care and pediatric nursing facilities.
Absent information from the Department of Human Services on the number of Medicaid
hospice care days that would potentially be affected by the bill’s provisions, the OLS estimates
that NJ FamilyCare covers between 689 and 956 days of hospice care within inpatient hospice
facilities each year, under both managed care and fee-for-service arrangements. This estimate is
derived by extrapolating site-specific federal Medicare hospice utilization data, which accounts
for approximately 90 percent of all hospice days, to the State’s Medicaid-enrolled population.
Thus, the OLS projects that increasing NJ FamilyCare reimbursement for these inpatient hospice
care days from the assisted living facility rate of $89.50 to the nursing home rate of $258.27 per
diem would increase NJ FamilyCare’s gross annual expenditures between $116,000 and $161,000.
Net State costs would increase between $56,000 and $78,000, assuming federal reimbursements
between $60,000 and $83,000 that are consistent with the federal matching rate for NJ
FamilyCare’s fee-for-service hospice expenditures in 2023.
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The OLS acknowledges that these net State costs may be underestimated if assisted living
facility reimbursements are not uniformly available for all NJ FamilyCare members currently
receiving hospice services from inpatient hospice facilities. The OLS also does not have
sufficiently detailed data to estimate: any additional State costs resulting from the increased
reimbursement rate’s indirect impacts on premium-based assessments or other non-benefit costs
borne by the State’s Medicaid managed care plans; or the extent to which the higher reimbursement
rate would divert more hospice recipients from nursing homes to inpatient hospice facilities, with
any additional effects on net State costs. Finally, the OLS notes that federal law explicitly
authorizes Medicaid reimbursement of hospice room and board services only when provided
within nursing facilities and intermediate care facilities for individuals with intellectual
disabilities, and that federal rules have historically prohibited Medicaid reimbursement of most
room and board costs in other long-term care settings. If federal reimbursement is not available for
this rate increase, the State may incur the full cost of $116,000 to $161,000 annually.
Section: Human Services
Analyst: Anne Cappabianca
Senior Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).


Statutes affected:
Introduced: 30:4D-6