1180 Payments to nonpublic and county nursing facilities; proposed rates for State Fiscal Year 20092010?

Payments to Nonpublic and County Nursing Facilities; Proposed Rates for State Fiscal Year 2009-2010

Purpose of Notice

[40 Pa.B. 3629]
[Saturday, June 26, 2010]

 This notice announces the Department of Public Welfare's (Department) proposed annual case-mix per diem payment rates for State Fiscal Year (FY) 2009-2010 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 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 2009-2010, 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 (CMI) for the appropriate picture date.¹

 In addition, as required by section 443.1 of the Public Welfare Code, 62 P. S. § 443.1(7)(iii)(A) (relating to Medical assistance payments for institutional care), the Department intends to adjust each facility's CMI-adjusted quarterly rate by multiplying the rate by a ''budget adjustment factor'' (BAF). On September 30, 2009, the Department submitted SPA 09-018 to CMS to include the BAF formulas that the Department will use in setting nonpublic nursing facility per diem rates for FY 2009-2010 and FY 2010-2011. If CMS approves SPA 09-018, the Department will apply a BAF of 0.90275 in setting each nonpublic nursing facility's rates for FY 2009-2010. The Department assumed that CMS will approve SPA 09-018 in calculating the proposed rates announced in this notice.

County Nursing Facility Per Diem Rates

 As required by the rate methodology set forth in 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 § 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 year's rate. In addition, as required by section 443.1 of the Public Welfare Code, 62 P. S. § 443.1(7)(iii)(A), the Department intends to adjust each county nursing facility's per diem rate by multiplying the rate by a BAF. On September 30, 2009, the Department submitted SPA 09-017 to CMS to include the BAF formula which the Department will use in FY 2009-2010. If CMS approves SPA 09-017, the Department will apply a BAF of 1.01 in setting each county nursing facility's rates for FY 2009-2010. The Department assumed that CMS will approve SPA 09-017 in calculating the proposed rates announced in this notice.

Discussion

 As specified in section 443.1(7)(iii) of the Public Welfare Code, the BAF moderates or caps the rate at which nursing facility payment rates increase from one year to the next, and, thus, ensures that the case-mix payment methodology results in payments that are consistent with efficiency and economy, as required by section 1902(a)(30)(A) of Title XIX (42 U.S.C.A. § 1396a(a)(30)(A)).The BAF for both nonpublic and county nursing facility rates would permit a 1% aggregate increase in the Statewide day-weighted average case-mix per diem from the prior FY. Taking this increase into account, case-mix per diem rates will have increased on an annual average basis by $5.30 per day and in the aggregate by 15.94% overall since FY 2004-2005.

 Section 1902(a)(30)(A) also requires that the Department's payment methods and standards result in payments that are consistent with ''quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area[.]'' The Department is confident that the combination of the adjusted case-mix per diem rates and other supplemental payment authorized under our State Plan² results in an overall funding level for MA nursing facility providers that has been, and will remain sufficient to assure that MA recipients continue to receive appropriate access to high quality care in this Commonwealth nursing facilities. The Department has seen no evidence that use of the BAF has adversely impacted the quality of care in Pennsylvania nursing facilities. Although the BAF has been used in rate-setting since FY 2005-2006, the number of licensing and certification actions taken against MA nursing facility providers and the number of serious deficiencies cited in those facilities have actually declined. Further, both before and after use of the BAF was implemented in 2005, the percent of nursing facilities in this Commonwealth with Substandard Quality of Care and Immediate Jeopardy citations has been consistently well below the United States average and neighboring states.

 At the same time, the level of participation by nursing facilities in the MA Program has remained high—the overwhelming majority of licensed nursing facilities are MA providers, and those providers operate 95% of all licensed nursing facility beds in the Commonwealth. In addition, the MA Program continues to pay for more days of care provided in this Commonwealth MA nursing facilities than all other payors combined. In 2008, for example, the MA Program paid for 68% of all nursing facility days. Based upon our paid claims history to date and our projections going forward, we expect to remain the single largest payor in the market place in both the current fiscal year and next fiscal year as well.

 The proposed annual per diem rates for FY 2009-2010 are available on the web site for the Department of Public Welfare at www.dpw.state.pa.us/PartnersProviders/MedicalAssistance/DoingBusiness/LTCCaseMixInfo/ and at local county assistance offices throughout this Commonwealth or by contacting Yvette Sanchez-Roberts, Department of Public Welfare, Office of Long-Term Living at [phone]. In addition, the Department has calculated adjusted quarterly rates for the October, January and April quarters of FY 2009-2010 for each nonpublic MA nursing facility provider. These adjusted quarterly rates are also posted on the Department's web site, and may be obtained at local county assistance offices and from Yvette Sanchez-Roberts.

Fiscal Impact

 If the proposed payment rates are adopted as final, the rates will result in an estimated increased cost of $24.433 million ($8.360 million in State funds) for per diem rate payments to nonpublic nursing facilities and an estimated increased cost of $5.539 million ($1.895 million in State funds) for per diem rate payments for county nursing facilities' FY 2009-2010 rates compared to the facilities' final FY 2008-2009 per diem rates. Funding for these changes has been included in the MA Long-Term Care appropriation.

Public Comment

 Interested persons are invited to submit written comments regarding the proposed annual rates for FY 2009-2010 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: Yvette Sanchez-Roberts, 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).

HARRIET DICHTER, 
Secretary

 Fiscal Note: 14-NOT-646. (1) General Fund; (2) Implementing Year 2009-10 is $10,255,000; (3) 1st Succeeding Year 2010-11 is $10,255,000; 2nd Succeeding Year 2011-12 is $10,255,000; 3rd Succeeding Year 2012-13 is $10,255,000; 4th Succeeding Year 2013-14 is $10,255,000; 5th Succeeding Year 2014-15 is $10,255,000; (4) 2008-09 Program—$672,597,000; 2007-08 Program—$692,585,000; 2006-07 Program—$695,279,000; (7) Long-Term Care; (8) recommends adoption. Funds have been included in the budget to cover this increase.

[Pa.B. Doc. No. 10-1180. Filed for public inspection June 25, 2010, 9:00 a.m.]

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¹  In computing the resident care, other resident related, and administrative rate components, the Department assumed that the Federal Centers for Medicare and Medicaid Services (CMS) will approve State Plan Amendment (SPA) 09-014, which, among other things, would extend the use of county nursing facility costs in the NIS database.

²  Currently, our approved State Plan authorizes quarterly supplemental payments to nonpublic nursing facilities that meet certain requirements. In FY 2009-2010, the quarterly supplemental payments will equal $11.04 for each PA MA Day of Care rendered by a qualifying nursing facility.
 The State Plan authorizes MA Day One Incentive (MDOI) payments for all county nursing facilities and Pay-for-Performance (P4P) for county nursing facilities that meet certain requirements. On September 23, 2009, the Department submitted SPA 09-021 to CMS to authorize increases in these payments for FY 2009-2010. If CMS approves SPA 09-021, the MDOI payments will be approximately $12.75 per each paid MA day and the P4P will equal $1,625,000 per quarter resulting in approximately $.79 to $.96 for each paid MA day, depending on the number of qualifying nursing facilities.
 In addition, the State Plan authorizes annual disproportionate share (DSH) payments to both nonpublic and county nursing facilities that have overall and MA occupancy rates at or above certain levels. The DSH payments range from $.64 to $7.30 for each MA Day paid as of a date determined in accordance with the 55 Pa. Code § 1187.111 (relating to disproportionate share incentive payments).