1065 Payments to nonpublic and county nursing facilities; proposed rates for state Fiscal Year 20112012

Payments to Nonpublic and County Nursing Facilities; Proposed Rates for State Fiscal Year 2011-2012

[41 Pa.B. 3306]
[Saturday, June 25, 2011]

 This notice announces the Department of Public Welfare's (Department) proposed annual case-mix per diem payment rates for State Fiscal Year (FY) 2011-2012 for nonpublic and county nursing facilities that participate in the Medical Assistance (MA) Program.

Nonpublic Nursing Facility Per Diem Rates

 As required by the case-mix payment methodology set forth in 55 Pa. Code Chapter 1187, Subchapter G (relating to rate setting), the Department intends to set an annual MA per diem rate for each nonpublic nursing facility provider. Each facility's annual per diem rate will have four components: resident care, other resident related, administrative and capital. For each quarter of FY 2011-2012, the Department will adjust the resident care component of each facility's rate by multiplying the resident care cost component by the facility's MA case-mix index for the appropriate picture date.

 In calculating the proposed rates, the Department assumed that peer group prices for FY 2011-2012 will be set as specified in 55 Pa. Code § 1187.94(1)(v) (relating to peer grouping for price setting), which provides for a 3-year phase-out of the use of county nursing facility costs in computing nonpublic nursing facility rates. Under § 1187.94(1)(v), the phase-out median used to establish peer group prices for rate year 2011-2012 will equal 25% of the interim median plus 75% of the median calculated in accordance with 55 Pa. Code § 1187.96 (relating to price- and rate-setting computations).

 Further, in computing the resident care cost component of the proposed rates, the Department assumed that the changes described in the proposed rulemaking, Transition to RUG-III Version 5.12 and Latest Assessment published at 40 Pa.B. 6525 (November 13, 2010), will be adopted. Under those rules, each nursing facility will receive a blended resident care rate for FY 2011-2012 which equals 50% of the nursing facility's RUG v. 5.01 resident care rate from the prior rate quarter adjusted by the percent increase or decrease in the RUG v. 5.12 resident care rate and 50% of the nursing facility's RUG v 5.12 resident care rate.

 Finally, in calculating the proposed rates, the Department assumed that the General Assembly will enact legislation, and the Centers for Medicare and Medicaid Services (CMS) will approve a State Plan Amendment (SPA) authorizing the continued use of a ''budget adjustment factor'' (BAF) in setting MA nursing facility payment rates for FY 2011-2012. A detailed description of the proposed BAF formulas for FY 2011-2012 is contained in the Payment for Nursing Facility Services Provided by County and Nonpublic Nursing Facilities; Notice of Change in Methods and Standards of Setting Payment Rates notice published at 41 Pa.B. 3303 (June 25, 2011), which is available online at http://www.pabulletin.com/secure/data/vol41/41-26/index.html. Under that proposed formula, the BAF will limit the estimated Statewide day- weighted average payment rate for MA nursing facility services for county and nonpublic nursing facilities so that the average payment rate in effect for the FY is limited to the amount permitted by the funds appropriated by the General Appropriations Act for the FY. However, instead of calculating one BAF for the FY, a BAF will be calculated each quarter of FY 2011-2012 for nonpublic nursing facilities.

County Nursing Facility Per Diem Rates

 As required by the rate methodology set forth in 55 Pa. Code Chapter 1189, Subchapter D (relating to rate setting), the Department intends to set an annual MA per diem rate for each county nursing facility provider. As specified in 55 Pa. Code § 1189.91(b) (relating to per diem rates for county nursing facilities), for each rate year beginning on or after July 1, 2007, the per diem rate paid to a county nursing facility for a rate year will be the facility's prior rate year per diem multiplied by a BAF determined in accordance with the formula in the Commonwealth's approved State Plan. As previously noted, the Department will be submitting an SPA to CMS to include the BAF formula which the Department will use in FY 2011-2012. Under the proposed SPA, the Department will continue to calculate and apply an annual BAF to setting county nursing facility payment rates.

 The proposed annual per diem rates for FY 2011-2012, July Quarterly BAF which will be applied to nonpublic nursing facility rates and the annual BAF which will be applied to county nursing facilities are available on the Department's web site at www.dpw.state.pa.us/provider/doingbusinesswithdpw/longtermcarecasemixinformation/index.htm and at local county assistance offices throughout this Commonwealth or by contacting Marilyn Yocum, Department of Public Welfare, Office of Long-Term Living at [phone]. The proposed rates and BAFs were computed based upon the level of funding provided in the Governor's Budget.

Fiscal Impact

 If the proposed payment rates are adopted as final, the rates will result in an estimated decreased cost of $59.274 million ($26.632 million in State funds) for per diem rate payments to nonpublic nursing facilities and an estimated decreased cost of $12.275 million ($5.515 million in State funds) for per diem rate payments for county nursing facilities' FY 2011-2012 rates compared to the facilities' proposed FY 2010-2011 per diem rates. The amount of funding available for this program is dependent upon the funds appropriated by the General Assembly in the forthcoming fiscal year. Therefore, until a budget bill is passed and enacted, any estimated fiscal impact associated with this notice is solely based on the funding levels as proposed in the Governor's Executive Budget.

Public Comment

 Interested persons are invited to submit written comments regarding the proposed annual rates for FY 2011-2012 to Department of Public Welfare/Department of Aging, Office of Long-Term Living, Bureau of Policy and Strategic Planning, Forum Place, 5th Floor, 555 Walnut Street, Attention: Marilyn Yocum, Harrisburg, PA 17101-1919. Comments received within 30 days will be reviewed and considered for any subsequent revision of the notice.

 Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at [phone] (TDD users) or [phone] (voice users).

GARY D. ALEXANDER, 
Acting Secretary

 Fiscal Note: 14-NOT-708. The amount of funding available for this program is dependent upon the funds appropriated by the General Assembly for the forthcoming fiscal year; therefore, until a budget bill is passed and enacted, any estimated fiscal impact associated with this notice is solely based on funding levels as proposed in the Governor's Executive Budget. Based on the proposed budget, this action will not result in a loss of revenue or an increase in program costs to the Commonwealth or its political subdivisions. (8) recommends adoption.

[Pa.B. Doc. No. 11-1065. Filed for public inspection June 24, 2011, 9:00 a.m.]