Alabama
Alabama’s Medicaid agency and its state plan are the official source for these rules. This page summarizes them as researched in October 2026; check the state’s own documents, listed under Sources, before relying on them.
At a glance
- Rate method
- Cost-based
- Case-mix level
- None
- Classification
- None
- Rate updates
- Twice a year
- Managed care (LTC)
- No
- Quality program
- Quality Incentive Add-on
- Paid outside the rate
- Small
- Bed hold
- Leave only
- Published rates
- Not published
- Assisted living
- Not covered
- Personal needs allowance
- $30 / month
Overview
- Alabama pays each nursing home its own audited cost per day, with ceilings set at the statewide median plus a margin.
- Every home files a July-June cost report by September 15.
- The Agency desk-audits it, inflates costs, and adds up four cost centers.
- (1) Operating/administrative: lesser of cost or median + 5%, with separate medians for homes of 75 beds or fewer and 76+ beds.
- (2) Direct care: cost + 10% (+11% in the state plan), capped at the ceiling (median + 10%) + 10%.
- (3) Indirect care: cost + 50% of the gap between cost and the ceiling (median + 10%), up to the ceiling.
- (4) Property: a fair rental value.
- Since 10/1/2025 there is also a Medicaid therapy add-on, plus a $1.25/day personal-laundry fee.
- There is no case mix: every Medicaid resident in a home gets the same daily rate.
- About 219 SNFs are enrolled (Agency page).
- Facility rates are not posted publicly.
What matters in Alabama
- No case mix: each home gets one cost-based daily rate for every Medicaid resident, whatever their care needs.
- Under 5% of pay comes outside the rate; Alabama has no supplemental, county or intergovernmental transfer programs for nursing homes.
- Rates rebase yearly from audited cost; direct care pays cost plus 10%, so lower spending lowers next year's rate.
- $4,756.80 per bed per year provider tax on every bed, no high-Medicaid discount, recovered as an allowable cost.
- Since 10/1/2025, therapy is paid through a per-Medicaid-day add-on, capped at $2 per day in aggregate.
- Medicare coinsurance on days 21-100 is paid up to the full Medicaid per diem, so usually the full $217.00.
Frequently asked
Does an Alabama nursing home keep savings from lower direct care spending?
No. Alabama rebases rates yearly from audited cost and pays direct care at cost plus 10%, so lower spending lowers the next year's rate.
Does Alabama Medicaid pay to hold a nursing home bed during a hospital stay?
No. Hospital holds are unpaid, but homes must hold the bed free for 4 days. Physician-certified home visits are paid.
Does a sale reset an Alabama nursing home's property payment to current value?
No. A buyer inherits the seller's current asset value, which changes only for approved renovations above 5% of that value, and these need prior Agency approval.
How much is paid outside the posted rate in Alabama?
Small, under 5% of base: mainly the quality add-on, therapy reconciliation and nurse aide training pass-through payments.
What does Alabama Medicaid pay on Medicare coinsurance days?
Coinsurance on days 21-100 is paid up to the home's full Medicaid per diem, so usually in full.
How is the Alabama nursing home provider tax charged?
$4,756.80 per bed per year on all beds, no high-Medicaid discount, recovered as an allowable cost in rates.
How the rate is set
How the method got here
| Effective | From | To | Change | Headline | Source |
|---|---|---|---|---|---|
| 1991-09-01 | Cost-based rates with a single 60th-percentile upper limit, plus depreciation/lease and return on equity for capital | Four cost centers (operating with bed-size medians, direct, indirect, property), each with a median-based ceiling, plus a Fair Rental System for capital | Alabama replaced its 60th-percentile cap and depreciation/return-on-equity capital with median-based ceilings by cost center and a fair rental payment based on a $25,000/bed standard value. | Median-based ceilings and fair rental system adopted | https://medicaid.alabama.gov/documents/9.0_Resources/9.8_Stat… |
| 2012-01-16 | No separate payment for ventilator-dependent residents | $120/day (indexed) supplemental fee-for-service payment for prior-authorized ventilator/tracheostomy residents | Alabama added a per-resident daily supplement for ventilator and qualified tracheostomy residents, its only acuity-linked payment. | Ventilator and tracheostomy daily supplement added | https://medicaid.alabama.gov/documents/9.0_Resources/9.2_Admi… |
| 2020-10-01 | Purely cost-based per diem with no quality component | Quality Incentive Add-on (MDS QMs + NRC satisfaction survey points x Medicaid days), plus a one-time 41.03% CAV increase | Alabama added its first quality-based payment and raised all fair rental asset values by 41.03%. | Quality add-on and 41.03% asset value increase | https://www.medicaid.gov/medicaid/spa/downloads/AL-20-0015.pdf |
| 2025-10-01 | Therapy not a Medicaid-allowable NF cost | Medicaid PT/OT/SLP costs allowable through a per-Medicaid-day therapy add-on capped at $2/day in aggregate | Alabama began paying for nursing home therapy through a cost-based add-on with an aggregate cap. | Therapy costs paid through capped per-day add-on | https://medicaid.alabama.gov/documents/9.0_Resources/9.2_Admi… |
Verified October 11, 2026
Cost basis
- Uses cost reports
Yes
- Cost report
Alabama Medicaid uniform Nursing Facility cost report (state-specific; Excel-based since the 6/30/2024 report), filed through the Myers and Stauffer web portal along with a trial balance and a mapping to cost report lines. Due September 15 for the July 1-June 30 year; late filing costs $100/day (560-X-22-.23).
- Base year and rebasing
Rebased every year. Each rate year uses the prior June 30 cost report, desk-audited and with ceilings recomputed. Rates are interim for July 1-December 31: the lower of the latest allowable rate (trended forward) or the ceiling. New rates take effect January 1, at a 'weighted' rate for the rest of the fiscal year. Example: the FYE 6/30/2024 reports set the January 1, 2025 rates, which were implemented retroactively by 2/1/2025 (Agency ALERT 12/18/2024). Field audits can later change rates and trigger lump-sum settlements.
- Components
Component Method Notes operating (management and administrative) Lesser of the home's inflated allowable cost per patient day or the ceiling. The ceiling is the median + 5%, computed separately for homes with 75 beds or fewer and 76+ beds. Includes administrator and office salaries, medical records consultant, legal/accounting, data processing, home office costs, and working-capital interest. 560-X-22-.06(2)(a); 4.19-D p.8. direct patient care Cost + 10%, capped at the ceiling + 10%. The ceiling is the statewide median cost per patient day + 10%. So a home below the ceiling is paid 10% above its own cost. Covers nursing, raw food, medical director, and nursing/pharmacy/dental consultants. The approved state plan (TN AL-11-021, eff. 1/16/2012, 4.19-D p.8) says +11%, not +10%; the admin code (amended 4/13/2026) still says +10%. indirect patient care Cost + 50% of the difference between cost and the ceiling (median + 10%), up to the ceiling. This is an efficiency incentive: low-cost homes keep half the savings. Covers plant operations, dietary (minus raw food), laundry (minus personal laundry), housekeeping, activities, social services, and free beauty/barber. property (fair rental) Fair rental value for each home; see capital. Divided by the home's reported total patient days, with no occupancy floor. Not subject to the operating/care ceilings. therapy services add-on (new) Medicaid share of PT/OT/SLP cost: Medicaid therapy charges / total therapy charges x total therapy cost, inflated, then divided by Medicaid patient days. Capped at $2 per Medicaid patient day in aggregate for each upper-payment-limit group; if the cap is exceeded, every home's add-on is cut by the same percentage. The $2 cap is indexed from January 1, 2028. Effective 10/1/2025 (pending CMS approval when announced). Budget add-ons were elected by 1/15/2026 and paid retroactively from Jan/Feb 2026. They are reconciled to actual costs in April 2027 by lump sum, and the 6/30/2026 actuals set the 1/1/2027 add-on. Medicare A/B must be billed first for duals. 560-X-22-.06(2)(d); ALERT 12/23/2025. personal laundry fee Fixed $1.25 per patient day for personal laundry, which every home must offer to Medicaid residents. 560-X-22-.12(5). nurse aide training and competency (NATCEP) Paid outside the per diem as a separate payment: test costs, outside training, supplies and transportation. These costs are reported in the unallowable section of the cost report. 560-X-22-.06(8). - Inflation
The 'Medicaid Inflation Index' is the DRI (now S&P Global) SNF market basket for the 12 months ending with the latest quarter available at October 1. It inflates allowable costs to the rate period. Interim rates are trended by the DRI national nursing-home market basket forecast available at June 1. Recent figures: 3.20% for the operating/direct/indirect centers in the January 1, 2025 rates, and 3.27% for January 1, 2026. Ceilings may not grow more than 4 percentage points above the DRI index over the prior year's ceiling (560-X-22-.06(2), .07).
Verified October 11, 2026
Case mix
- System
None
- Applied at
None
- How it works
Acuity does not affect pay. Each home gets one cost-based per diem for every Medicaid resident (560-X-22-.05/.06; 4.19-D). The only acuity-linked payment is the prior-authorized ventilator/tracheostomy add-on for each qualifying resident.
- Classification
none
- Applies to
n/a
- Acuity measured from
n/a. MDS is used only for level-of-care and ventilator/trach prior authorization, not for rates.
- Updated
n/a
- Move to PDPM
Not applicable. Alabama never used RUG-based Medicaid case mix, so the October 2023 end of CMS OBRA RUG support did not affect it.
Verified October 11, 2026
Low-acuity residents
None. Alabama has no reduced or flat rate for low-acuity residents and no case-mix groups. A resident either meets nursing facility level of care, with Medicaid admission criteria checked by retrospective review, or is not covered. If medical necessity is not met, the Agency recoups the payment instead of paying a lower rate (560-X-10-.10(3)). Checked: 560-X-22 (all rules), 560-X-10-.09/.10, and 4.19-D.
Verified October 11, 2026
Capital
Fair Rental System (since 9/1/1991; 560-X-22-.06(2)(e), -.14). It replaces depreciation, lease payments and return on equity. (1) Current asset value (CAV): a standard value of $25,000/bed (as of 9/1/1991), less 1% per year of age (max 50% reduction, $12,500/bed floor). The CAV is indexed every July 1 by the Marshall-Swift construction index, capped at 3%/yr; the index was 0.5% for the 1/1/2025 rates. All CAVs were raised 41.03% effective 10/1/2020 (SPA AL-20-0015). (2) Rental value = 2.5% gross rental factor x CAV. (3) Return = (CAV - allowable debt) x the 30-year Treasury yield at June 30, plus CAV x 1.5% ownership risk premium. The Agency put the 2025 rate of return on CAV at 6.01%. (4) Allowable interest on property debt, property taxes and property insurance are added. All of this, minus a 1.5% laundry allocation, is divided by total reported patient days. A buyer inherits the seller's CAV. CAV is adjusted for approved renovations above 5% of CAV, which need prior Agency approval. Specialized heavy-care equipment (feeding pumps, ventilators, oxygen concentrators, Clinitron beds, etc.) is reimbursed per Medicaid day on top of fair rental. CON approval is required for any property cost to count. NF/IMD and state-owned homes get a use allowance (2% buildings, 6 2/3% equipment) instead.
Verified October 11, 2026
Budget adjustment factor
None found. There is no across-the-board cut or budget-neutrality factor on computed rates. Growth limits are built in: (1) the ceiling may grow no more than DRI + 4 percentage points a year; (2) the CAV index is capped at 3%/yr; (3) the therapy add-on has an aggregate cap of $2 per Medicaid day for each UPL group, with a uniform pro-rata cut if exceeded. Payment is also limited to the lower of the computed rate or the home's usual and customary charge (4.19-D IV.A.7).
Verified October 11, 2026
Add-ons and money outside the rate
Paid outside the posted rate
- Level
small
- Estimate
Under 5% of base. There are no UPL, IGT or directed payments for NFs. Payments outside the posted per diem are limited to the annual Quality Incentive Add-on (budget not found), NATCEP pass-through payments, therapy-add-on reconciliation lump sums, and audit and CHOW settlements. Derived from the absence of any NF supplemental program in 4.19-D and the full state plan (7/13/2026 compilation).
- Components
Quality Incentive Add-on (pool unknown; the FFY2021 federal share of SPA 20-0015, including the CAV increase, was about $17.7M). Therapy add-on reconciliation (the add-on is about $10.6M/yr in total, mostly paid in the rate). NATCEP pass-through (small).
Verified October 11, 2026
Payments by owner type
- Applies
yes
- Detail
Narrow. State-owned and state-operated homes, and NF/IMD units, are paid actual allowable cost with no ceilings and a property use allowance instead of fair rental, so a state home is never capped. There is no county or hospital-authority IGT/UPL program, so privately owned and local public homes are paid the same way. The number of state-owned NFs was not found.
- Funding
No IGT. Normal state general fund/privilege tax plus federal match.
Verified October 11, 2026
Quality program
- Program
Nursing Facility Quality Incentive Add-on (Attachment 4.19-D pp.10.b-10.c, SPA AL-20-0015, effective 10/1/2020, CMS-approved 4/13/2021).
- Funding
A 'total quality budget' set by the Agency. The source and whether it is budget neutral are not stated in the plan. The CMS-179 for AL-20-0015 shows a federal impact of $17,727,870 for FFY2021 and $18,448,092 for FFY2022, but that also covers the 41.03% CAV increase.
- Paid as
Per diem quality incentive component. The plan calls it an add-on 'distributed to nursing homes annually', computed from points x Medicaid days.
- Measures
Measure Source Weight How points are earned Long-stay residents assessed and given seasonal influenza vaccine MDS QM (CMS Nursing Home Compare), 4-quarter average as of July 1 up to 3 points 3 points at or above the national average; 0.75 points for 10% year-over-year improvement Long-stay residents assessed and given pneumococcal vaccine MDS QM up to 3 points 3 points at or above the national average; 0.75 points for 10% improvement Long-stay residents who received an antipsychotic medication MDS QM up to 3 points 1 point at or better than the national average, 2 points 20% better, 3 points 40% better; 0.75 points for 10% improvement Long-stay residents physically restrained MDS QM up to 3 points 3 points at or better than the national average; 0.75 points for 10% improvement SNF residents with new or worsened pressure ulcers MDS QM up to 3 points 1 point at or better than the national average, 2 points 5% better, 3 points 10% better; 0.75 points for 10% improvement Customer satisfaction: combined resident and family 'Willingness to Recommend' NRC Health satisfaction survey up to 3 points 1 point for a 5-point TopBox gain over the prior year; 2 points for beating the national Top-3-Box average; 3 points for beating the national TopBox average. Year One gave 3 points for a combined response rate of 30% or more. - Scoring period
Each rate period uses the most recent 4-quarter average of CMS MDS QMs available at July 1 of the year the rate period begins, plus the most recent NRC Health survey summary.
- Payment formula
Points (max 18) x annualized Medicaid days from the latest June 30 cost report = weighted score. $ per point = total quality budget / sum of weighted scores. A provider's quality component = its weighted score x $ per point.
- Eligibility
The home must accept Medicaid, complete the latest NRC Health satisfaction survey, and earn at least 4 points. Participation is voluntary (homes may opt out).
- Cadence
Annual
- Scores published
Not found
- Notes
No public Agency page, ALERT or payment file for this program was found. Whether it still pays in 2026, and the yearly budget, are unconfirmed (see open_questions). The plan says Alabama 'does not adjust the per diem ... based on service deficiencies or quality of service' (4.19-D IV.C), which predates this add-on.
Verified October 11, 2026
Provider tax
- Charged
per bed
- Standard amount
$4,756.80 per bed per year ($396.40 per bed per month), the sum of the base privilege assessment, supplemental assessment, monthly surcharge and second supplemental assessment. This is the current Department of Revenue rate as of Oct 2026; effective dates of each part were not captured.
- Lower for high-Medicaid homes
no
- Returned in the rate
The tax counts as an allowable cost (since 1/1/1993; interest and penalties are not allowable), so the Medicaid share comes back through each home's cost-based per diem. There is no separate add-on. The cost center it is reported in (property vs operating, which decides whether a ceiling applies) was not confirmed.
Verified October 11, 2026
Provider tax notes
Alabama Nursing Facilities Privilege Assessment (Code of Ala. 40-26B-20 to -27), collected by the Department of Revenue. It has four parts: the privilege assessment, a supplemental assessment, a monthly surcharge and a second supplemental assessment. The total is $4,756.80 per bed per year ($396.40 per bed per month), filed monthly. It applies to every bed, whatever the payer. The tax has been an allowable Medicaid cost since 1/1/1993 (560-X-22-.14(16)), so the Medicaid share flows back through each home's cost-based per diem.
Verified October 11, 2026
Supplemental payments
None found for nursing facilities. The state plan has UPL and access payments only for hospitals; Attachment 4.19-D has no UPL, IGT or county-home supplemental program. Past one-time items: a COVID disaster-relief $20/day add-on for all NFs, rescinded effective 1/1/2022; then a supplemental payment to all NFs under disaster SPA AL-22-0014, extended to 6/30/2023 (about $39.0M; public notice 3/20/2023). The Quality Incentive Add-on is the only recurring payment beyond the cost-based rate (see quality_incentive).
Verified October 11, 2026
Other add-ons
(1) Ventilator-dependent / qualified tracheostomy supplement: $120/day at the 1/16/2012 start, indexed every year by the DRI cost-of-living factor. It is paid on top of the per diem for each prior-authorized resident, approved in 12-month intervals (560-X-63-.10; 4.19-D V.D). The current indexed amount is not found. (2) Therapy add-on (from 10/1/2025; see cost_basis). (3) $1.25/day personal laundry fee. (4) Specialized heavy-care equipment per diem (rental/depreciation/interest per Medicaid day, added to the property per diem). (5) NATCEP costs paid outside the rate. (6) Quality Incentive Add-on. COVID-era add-ons have ended (see supplemental_payments).
Verified October 11, 2026
Units paid separately
(1) NF/IMD (mental disease, residents over 65) and NF/IDD (developmentally disabled, 18 and under): rates are computed the same way but are exempt from all ceilings. NF/IMD gets a use allowance instead of fair rental. (2) State-owned and state-operated homes: actual cost with no ceilings, no direct/indirect incentive, and a use allowance (2% buildings, 6 2/3% equipment) instead of fair rental (560-X-22-.06(2)(i)). (3) Ventilator/tracheostomy residents: per diem + the $120 (indexed) daily supplement with prior authorization. Respiratory therapist and vent-supply costs are taken out of the per diem cost base (560-X-63-.10(6)). Homes that are Special Focus Facilities or facing termination may not admit these residents. (4) Out-of-state placements, made only when no suitable Alabama bed exists and prior-approved: paid the other state's Medicaid rate (4.19-D VII.D). (5) New homes, changes of ownership (CHOW) and changes of category: may be paid on a budget, subject to the ceiling, then settled to actual cost; a new owner may instead keep the old owner's rate. (6) ICF/IID facilities are paid under a separate method (Chapter 42; ceiling at the 90th percentile).
Verified October 11, 2026
Payment rules
Managed care for long-term care
- Status
no
- Detail
Fee-for-service; the Integrated Care Network does case management only, not payment
Verified October 11, 2026
Who pays
fee_for_service. The Agency pays nursing homes directly through its fiscal agent (Gainwell). The Integrated Care Network (ICN, run by Alabama Select Network) is a Primary Care Case Management Entity, approved by CMS 9/12/2018, that does case management for long-term care beneficiaries. It is not a capitated plan and does not set or pay NF rates. PACE also operates. Source: https://medicaid.alabama.gov/content/5.0_Managed_Care/5.2_Oth…
Verified October 11, 2026
Managed care rate floor
Not applicable. Nursing home days are paid fee-for-service by the Agency, and no capitated MLTSS plan pays NF claims. Source: ICN page (PCCM entity model) and 560-X-10-.09 (the facility's assigned payment rate is paid by the fiscal agent).
Verified October 11, 2026
Included in the daily rate
Included (560-X-10-.04(1)): all nursing services, personal care and hygiene supplies, semi-private room and board including special diets and tube feeding, incontinence supplies, linens, and nursing and treatment supplies (catheters, dressings, IV sets and normal IV fluids). Also standard wheelchairs and walkers, suction, oxygen concentrators, pressure-sore materials, medically necessary OTC drugs (except OTC insulin) and personal laundry. Since the 2025/2026 amendment, medically necessary PT/OT/SLP is covered and paid through the therapy add-on. Not included, but available for a separate charge: prosthetics/splints/crutches, tanks of oxygen, routine dental, private room (unless therapeutically needed), beauty/barber, and personal comfort items. Paid by Medicaid under separate programs: prescription drugs, hospital, lab, X-ray and physician services.
Verified October 11, 2026
Bed hold
- Hospital stays
Not paid by Medicaid. For the first 4 days of a hospital stay, the home may not charge the Medicaid resident, family or sponsor to hold the bed, and must take the resident back if released within those 4 days. In effect this is a mandatory unpaid 4-day hold. After day 4 the resident/family must arrange and pay for any reservation. Inpatient admission requires discharge from the NF.
- Leave days
Paid. Visits to home, relatives or friends must be physician-certified, up to 3 days per visit and 6 days per calendar quarter (560-X-10-.06). Chapter 22 and the state plan state the limits differently: 22-.08 allows 6 visits per 12 months and 2 per quarter, and 4.19-C (2000) allows 8 visits per calendar year and 2 per quarter. No percentage of the per diem is stated; leave days are billed as covered days.
- Occupancy rule
None
- Notes
The 4-day no-charge rule does not apply during Medicare-covered stays, to pending Medicaid applicants (refund required if later approved retroactively), or to residents given a discharge notice for non-payment. Refusing readmission within the 4 days can lead to provider agreement termination.
Verified October 11, 2026
Personal needs allowance
- Per month
30
- Effective
$30 in State Plan Attachment 2.6-A p.4a (TN AL-98-07, effective 1998-05-01); the federal minimum, unchanged since 1988.
- Notes
Alabama State Plan Attachment 2.6-A p.4a sets the PNA for aged, blind and disabled institutional residents at 'Individuals $30.00'. Ala. Admin. Code 560-X-25 points to this attachment for the amount. The Agency's 'Medicaid for the Elderly and Disabled' guide (rev. 1/2019) says 'Personal Needs ($30.00) or VA ($120.00, if VA check reduced to $90.00)'. Not COLA-indexed. VA aid and attendance and unusual medical expense payments are protected separately.
- Confidence
confirmed
Verified October 11, 2026
Medicare coinsurance days
- Method
coinsurance_up_to_rate
- Rule
Coinsurance is paid up to the home's Medicaid per diem; the cap is written into both rules. (1) 560-X-10-.09(3) (Ch. 10 compiled 8/26/2026; this rule last amended 4/13/2026): '(a) Medicaid may pay the Part A coinsurance for the 21st through the 100th day for Medicare/Medicaid eligible recipients who qualify under Medicare rules for skilled level of care. (b) An amount equal to that applicable to Medicare Part A coinsurance, but not greater than the facility's Medicaid rate will be paid for the 21st through the 100th day. No payment will be made by Medicaid for nursing care in a nursing facility for the first 20 days of care for recipients qualified under Medicare rules.' (2) 560-X-1-.14(2)(b) (Ch. 1 as posted, compiled 3/18/2021; there is no 8/26/2026 compilation of Ch. 1): 'Medicaid may pay the Part A coinsurance for the 21st day through the 100th day for Medicare/Medicaid and/or QMB eligible recipients who qualify under Medicare rules for skilled level of care. An amount equal to that applicable to Medicare Part A coinsurance, but not greater than the facility's Medicaid rate will be paid for the 21st through the 100th day. No payment will be made by Medicaid (Title XIX) for skilled nursing care in a dual certified nursing facility for the first 20 days of care...' (3) State plan Supplement 1 to Att. 4.19-B p.2 (TN AL-97-06) marks Part A coinsurance 'SP' (payments limited to State plan rates) for QMBs, other Medicaid recipients and QMB-plus, while Part A deductibles are 'MR' (up to the full Medicare amount). The cap is the home's whole per diem, NOT the federal 'lesser-of' method (Medicaid rate minus the Medicare payment, often $0). Provider Billing Manual: posted only behind the Agency's CPT/CDT license click-through (content/Gated/7.6.1G_Provider_Manuals.aspx), which was not accepted; direct PDF paths for Chapter 26 / crossover chapters returned 404. No current Agency ALERT on SNF coinsurance or crossover was found among the 29 posted ALERTs. Medicare Advantage: no Alabama rule found for MA SNF cost-sharing. Att. 3.2-A (TN AL-96-08) says Medicaid covers 'Medicare HMO premiums, coinsurance, and deductibles through a capitation payment to the Medicare HMO', which is not a current NF-specific rule.
- Effect
In practice the home almost always gets the full Part A coinsurance ($217.00/day in 2026) on days 21-100, because the cap is the home's whole Medicaid per diem and Alabama per diems run well above $217. The Agency's FY2024 Annual Report gives $85,344/yr in Medicaid cost per average nursing home beneficiary, about $234/day net of the resident's applied income. FY2019-2020 statistics show residents/third parties cover about 14-15% of each claim, which implies a gross per diem near $270 in FY2024, before the 3.20% (1/2025) and 3.27% (1/2026) inflation updates. The cap binds only for an unusually low-cost home whose per diem is below the coinsurance. Facility-level rates are not published, so the range is not known. MA cost-sharing is unconfirmed.
Verified October 11, 2026
Required care spending
- Applies
no
- Rule
No minimum spending or recoupment rule. Being cost-based already ties pay to spending: direct care pays cost + 10% (up to ceiling + 10%), so unspent direct-care money is not paid in the next rate. The Agency can also lower allowable costs for homes it deems overstaffed in any area (560-X-22-.09).
Verified October 11, 2026
Occupancy rules
- Applies
no
- Rule
None. All cost centers, including fair rental, are divided by the home's actual reported total patient days, with no minimum occupancy. The therapy add-on uses actual Medicaid patient days. Paid hold days and pre-admission days count as patient days, which lowers the per-day cost.
Verified October 11, 2026
MDS accuracy penalties
None. Alabama has no case mix, so MDS accuracy does not affect rates. Related recoupment rules: (1) retrospective medical-necessity review of admissions, with recoupment of NF payments (and possibly other Medicaid services) when level-of-care criteria were not met (560-X-10-.07, -.10); (2) a cost report negligence penalty of 5% of the overpayment, or 50% for fraud (560-X-22-.28); (3) $100/day for late cost reports (560-X-22-.23).
Verified October 11, 2026
Published rates and changes
How often rates change
- A home's rate changes
semiannual
- When
Jul 1 interim rate; Jan 1 final rate set so the year averages to the computed rate
Verified October 11, 2026
When rates change
The cost report and fiscal year run July 1-June 30, with reports due September 15. Interim rates cover July 1-December 31: the lower of the latest computed rate (trended by the DRI forecast) or the ceiling. New computed rates take effect January 1. For January-June the home is paid a 'weighted' rate = (allowable rate x 12 - interim rate x months paid) / months remaining, so the year averages to the allowable rate. Rates often come out late and are applied retroactively, with automatic claim reprocessing (e.g. the 1/1/2025 rates were implemented by 2/1/2025). Mid-year changes include renovations (interim rate in the month the project is completed), approved extraordinary costs, CHOW/new-facility budgets, and therapy add-on retro adjustments. The monthly rate is the per diem x 30.42 days for a full-month resident (560-X-22-.06(6)).
Verified October 11, 2026
Posted rates
- Home-level rates published
No
- Where
Not posted. The Agency notifies each provider of its rate. Cost reports and rate letters can be requested with Form 602 (https://medicaid.alabama.gov/content/7.0_Providers/7.12_Skill…). Under 4.19-D VII.C, the methodology and data used to set per diem rates 'may be obtained by the public upon written request and payment of a reproducing fee'.
- Format
none
- Cadence
Annual (January 1 computed rates, July 1 interim rates). The Agency posts ALERTs with the inflation %, CAV index and rate of return each December.
- History
None online. ALERTs on the SNF Reimbursement page go back to 2024.
- Home identifier
n/a. Agency forms use the Medicaid legacy provider number (format 47-xxxxxS).
Verified October 11, 2026
Rate build-ups
- Published
No
- Where
Not published. The Agency's Provider Audit Division (Quality Assurance/Reimbursement Unit) computes rates from desk-audited cost reports. Rate letters go only to each provider, or to the public on written request.
Verified October 11, 2026
Recent changes
| Effective | Change | Headline | Direction | Size | Source |
|---|---|---|---|---|---|
| 2024-06-30 | Moved to an Excel-based NF cost report submitted through a Myers and Stauffer web portal (starting with the 6/30/2024 report); data fields largely unchanged. | Excel-based cost report filed through web portal | structural | https://medicaid.alabama.gov/alert_detail.aspx?ID=16375 | |
| 2025-01-01 | Annual rebase from FYE 6/30/2024 cost reports, implemented late (retroactive by 2/1/2025): inflation 3.20% for operating/direct/indirect, CAV index +0.5%, rate of return on CAV 6.01%. | Annual rebase with 3.20% inflation | increase | inflation 3.20%; CAV index +0.5%; return on CAV 6.01% | https://medicaid.alabama.gov/alert_detail.aspx?ID=16497 |
| 2025-10-01 | Medicaid PT/OT/SLP became allowable NF costs, paid as a per-Medicaid-day therapy add-on (budget election by 1/15/2026, retroactive in Jan/Feb 2026, reconciled April 2027), capped at $2 per Medicaid day in aggregate for each UPL group. | Therapy add-on capped at $2 per Medicaid day | increase | SPA public notice: +$7,687,886 federal + $2,897,115 state (about $10.6M total) | https://medicaid.alabama.gov/documents/9.0_Resources/9.8_Stat… |
| 2026-01-01 | Annual rebase from FYE 6/30/2025 cost reports with a 3.27% inflation rate. | Annual rebase with 3.27% inflation | increase | inflation 3.27% | https://medicaid.alabama.gov/alert_detail.aspx?ID=16684 |
| 2026-04-13 | Chapters 22 and 10 amended permanently (after an emergency rule of 12/19/2025) to define therapy cost, add the therapy cost center and add-on, exclude therapy-related renovations from CAV renovation adjustments, cover PT/OT/SLP as an NF service, and require Medicare A/B to be billed first for dual-eligible therapy. | Therapy rules made permanent in administrative code | structural | https://medicaid.alabama.gov/documents/9.0_Resources/9.2_Admi… |
Verified October 11, 2026
Assisted living
Medicaid assisted living
- Covered
no
- Program
None for elderly/disabled assisted living. The Elderly and Disabled 1915(c) waiver (560-X-36-.04) covers in-home services only: homemaker, personal care, respite, companion, adult day health, home-delivered meals, home modifications, pest control, case management. Other waivers (SAIL, ACT, TA, and ID/CWP/LAH for intellectual disabilities) do not pay assisted-living services for elders.
- What is paid
Nothing for ALF services. The resident pays privately.
- Rate
n/a
- Limits
n/a
Verified October 11, 2026
Sources
- Alabama Admin. Code Ch. 560-X-22 Nursing Facility Reimbursement (compiled 8/26/2026) · regulation
- Alabama Admin. Code Ch. 560-X-10 Long Term Care (compiled 8/26/2026) · regulation
- Alabama Admin. Code Ch. 560-X-1 General (Rule 560-X-1-.14 Medicare/QMB payments) · regulation
- Alabama Admin. Code Ch. 560-X-63 Ventilator-Dependent and Qualified Tracheostomy Care · regulation
- Alabama Admin. Code Ch. 560-X-36 HCBS Elderly and Disabled Waiver · regulation
- Alabama Admin. Code Ch. 560-X-20 Third Party (Medicare Advantage enrollment edits) · regulation
- State Plan Attachment 4.19-D Nursing Facility Reimbursement (posted 4/22/2022) · state plan
- State Plan Attachment 4.19-C Reserved Beds · state plan
- Alabama State Plan, full bookmarked compilation 7/13/2026 (Supplement 1 to 4.19-B; Att. 3.2-A; hospital UPL sections) · state plan
- CMS approval package SPA AL-20-0015 (CAV +41.03%, Quality Incentive Add-on), approved 4/13/2021 · state plan
- Public notice: SPA Nursing Facility Services (therapy), filed 9/19/2025 · agency page
- Public notice: Disaster Relief NH supplemental payment extension to 6/30/2023 · agency page
- Public notice: Rescind COVID $20/day NF add-on eff. 1/1/2022 · agency page
- Alabama Medicaid Skilled Nursing Facility Reimbursement page · agency page
- ALERT: Therapy Add-on Election, Retroactive Rate Changes, January 1 Inflation Rate (12/23/2025) · agency page
- Budget Therapy Add-on Election workbook (12/23/2025) · rate file
- ALERT: Notice of Delay - January 1, 2025 SNF Per Diem Rates (12/18/2024) · agency page
- ALERT: Change in Cost Reporting Software (5/22/2024) · agency page
- Alabama Dept. of Revenue FAQ: Alabama Nursing Facilities Privilege Assessment · agency page
- Alabama Medicaid Integrated Care Networks (ICN) page · agency page
- Alabama Medicaid FY2024 Annual Report (Long-Term Care: 219 NFs, 26,518 beds, $85,344 average annual NF cost per beneficiary, $114M bed assessment) · agency page
- Alabama Medicaid FY2019-2022 Long Term Care Program Patient Days and Costs · agency page
- Personal needs allowance · secondary
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