1066 Rate setting methodology for Consolidated and Person/Family Directed Support Waiver- and Base-Funded Services for individuals participating in the Office of Developmental Programs Service System

Rate Setting Methodology for Consolidated and Person/Family Directed Support Waiver- and Base-Funded Services for Individuals Participating in the Office of Developmental Programs Service System

[41 Pa.B. 3307]
[Saturday, June 25, 2011]

 The purpose of this notice is to announce that, effective July 1, 2011, the Department of Public Welfare (Department) is revising the methodology used in the Prospective Payment System to develop rates for residential eligible and transportation per diem and trip, funded through the Consolidated and Person/Family Directed Support (P/FDS) waivers (waivers) and for the same service that is provided with base funding from that waiver funded service location.

 The methodology described in this notice does not include the Medical Assistance program fee schedule services or rates.

Background

 Beginning in 2009, the Department began implementation of a Statewide rate setting system to establish provider payment rates consistently across the Commonwealth. The Department continues to move in a direction to align rates and rate-setting methodologies across programs.

Rate-Setting Methodology for Residential Eligible Cost-based Services

 The proposed payment rates for residential eligible cost report-based services were developed from the data in the Year 3 cost reports (Version 6.0—FY 2009-2010 Historical Expense Period) submitted by providers and approved in the desk review process, where the procedure codes and service locations in the cost reports were the same as those entered in the Support and Service Directory (SSD) as of December 31, 2010. Procedure codes and service locations included in the cost reports, but not entered in the SSD as of December 31, 2010, were not included in calculating proposed payment rates. The rates were also calculated using the following methodologies.

Outlier Review Process

 The ''total unit cost'' for a provider and service was equal to the total expenses for that provider and service divided by the total available units for that provider and service as provided in the submitted cost reports. The total utilization included adjustments based on a review of the cost report data compared to available Home and Community Services Information System and Provider Reimbursement and Operations Management Information System in electronic format (PROMISe^TM) data.

 The Department identified and adjusted for outliers at the total unit cost level for each of the providers' cost-based services submitted in Year 3 approved cost reports. For all services with 20 or more unique unit costs (that is, unit costs by provider and service from separate, approved—Year 3 cost reports), the Department applied the following for each service:

 • The average and standard deviation (SD) values were calculated, excluding extreme outliers, based on the total unit costs for all providers from the Year 3 cost report data.

 • Total unit costs that were greater than the average plus one SD or were less than the average minus two SD were flagged as outliers.

 • For total unit costs that were flagged as outliers and were within +/- 5% of the provider's average Fiscal Year (FY) 2010-2011 rate for that service and applicable service locations, the total unit cost was accepted and did not undergo a review.

 • For total unit costs that were flagged as outliers and were not within +/- 5% of the provider's average FY 2010-2011 rate for that service and applicable service locations, the total unit cost did undergo a review, as described below.

Total Unit Cost Review

 The Department performed a standardized review of all total unit cost outliers that were not within +/- 5% of the average FY 2010-2011 rate. The review consisted of an evaluation of the Individual Service Plans (ISPs) for waiver participants receiving services at the service locations impacted by the outlier unit cost. The Department established a structured review process and review procedures to ensure consistency across the Commonwealth. The review allowed the Department to determine whether the outlier unit cost was justified (such as an individual with complex needs).

 • Total unit cost outliers that were justified based on the ISP reviews were not adjusted.

 • Total unit cost outliers that were greater than the average unit cost plus one SD and were not justified based on the ISP reviews, were adjusted to the maximum unit cost below the average plus one SD for that service.

 • Total unit cost outliers that were less than the average unit cost minus two SD and were not justified based on the ISP reviews, were adjusted to the minimum unit cost above the average minus two SD for that service.

 For all cost-based services with less than 20 unique total unit costs, the Department did not perform an outlier review on the total unit costs for those services because not enough data points were available to produce statistically valid ranges.

Cost of Living Adjustment and Rate Adjustment Factor (RAF)

 After the unit costs for each cost-based procedure code were adjusted as previously described, a total cost of living increase of 0% (0% for FY 2009-2010 and 0% for FY 2010-2011) was applied to the FY 2009-2010 unit costs for each procedure code to establish each provider's proposed payment rates for FY 2011-2012.

 The Department compared projected FY 2011-2012 State and Federal expenditures to the corresponding FY 2011-2012 budget appropriation for the Consolidated and P/FDS waiver programs to determine if a RAF was necessary for the FY 2011-2012 rates. State and Federal expenditures were projected using the proposed payment rates and projected utilization, which was based on actual FY 2010-2011 utilization and utilization trend factors determined by the Department. A RAF -0.71% was applied to the unit costs for all residential eligible cost-based services.

Rate Assignment Process

 A provider was assigned the average of its cost report rates for an existing service at a new service location, if the provider submitted cost report data at other locations for the service in the cost report. A provider was assigned the area adjusted average of all providers' cost report rates for new services, if the provider did not submit cost report data for the service in the provider's cost report (that is, the provider did not provide this service at any service location in FY 2009-2010).

 The Department established a provider's rate as the lowest rate calculated based on all approved cost reports if a provider:

 • Did not attempt a cost report submission by the published deadline.

 • Attempted a cost report submission but the provider failed to successfully upload to the cost report submission to the web site.

 • Successfully submitted a cost report but did not resubmit as requested during the desk review process.

 Providers who failed the desk review on their initial cost report submission and who resubmitted their cost report, but whose resubmission still failed the desk review process were assigned the 25th percentile rate calculated based on all approved cost reports for all services.

Rate Setting Methodology for Per Diem and Trip Transportation Cost-Based Services

 The proposed payment rates for Per Diem and Trip transportation services were developed from the data submitted in the Year 3 transportation cost reports (FY 2009-2010 Historical Expense Period) submitted by providers and approved in the desk review process, where the procedure codes and service locations in the transportation cost reports were the same as those entered in the SSD as of December 31, 2010. The Department reviewed the transportation cost reports which were submitted by the transportation providers and compared the services where costs were allocated in the cost report to the service offered in the SSD. Where there was an exact match between what was reported on the cost report and what was in the SSD, the cost report based rate was used for rate setting. If there was not an exact match but the provider submitted a cost report, the area average rate was assigned to the services offered in the SSD, but not reported on the cost report.

 If the transportation provider did not submit a cost report, the lowest rate was assigned for the services offered in the SSD. If there was a new provider that started services in FY 2010-2011 and did not have historical experience, the area average rate was assigned. If an agency was signed up in the SSD to provide Per Diem and Trip transportation services, but they are considered a public carrier or are no longer providing Per Diem or Trip transportation service and have not been deleted from the SSD, $.01 was assigned as the rate.

 There is no Cost of Living Adjustment applied to the proposed cost-based services rates for FY 2011-2012. All proposed payment rates for all waiver-funded services are contingent on the final budget enacted by the General Assembly. The proposed rates should be used to process claims submitted to the PROMISe^TM for services provided during FY 2011-2012 until a notice announcing final rates is published.

Fiscal Impact

 There is no anticipated fiscal impact. 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

 Copies of this notice may be obtained at the local Mental Health/Mental Retardation (MH/MR) County Program, Administrative Entity (AE) or regional Office of Developmental Programs (ODP) in the corresponding regions:

 • Western region: Piatt Place, Room 4900, 301 5th Avenue, Pittsburgh, PA 15222 [phone]

 • Northeast region: Room 315 Scranton State Office Building, 100 Lackawanna Avenue, Scranton, PA 18503 [phone]

 • Southeast region: 801 Market Street, Suite 5071, Philadelphia, PA 19107 [phone] or [phone]

 • Central region: Room 430 Willow Oak Building, P. O. Box 2675, DGS Annex Complex, Harrisburg, PA 17105 [phone]

 Contact information for the local MH/MR County Program or AE may be found at https://www.hcsis.state.pa.us/hcsis-ssd/pgm/asp/PRCNT.ASP, or contact the previously referenced regional ODP.

 Interested persons are invited to submit written comments regarding this notice to the Department at the Office of Developmental Programs' rate-setting mailbox at [e-mail], use subject header ''PN PPS Methodology,'' or Department of Public Welfare, Office of Developmental Programs, Division of Provider Assistance and Rate Setting, 4th Floor, Health and Welfare Building, Forster and Commonwealth Avenues, Harrisburg, PA 17120.

 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-703. 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. 11-1066. Filed for public inspection June 24, 2011, 9:00 a.m.]