1181 Payments to nonpublic and county nursing facilities; proposed rates for State Fiscal Year 20102011?

Payments to Nonpublic and County Nursing Facilities; Proposed Rates for State Fiscal Year 2010-2011

Purpose of Notice

[40 Pa.B. 3630]
[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) 2010-2011 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. In computing the resident care, other resident related, and administrative rate components of the proposed rates, 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.

 Further, for each quarter of FY 2010-2011, 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. As described in the notice Payment for Nursing Facility Services Provided by Nonpublic and County Nursing Facilities; Change in Methods and Standards of Setting Payment Rates published at 40 Pa.B. 3627 (June 26, 2010), the Department intends to make additional changes to the payment methodology to phase in the use of the MDS RUG-III v. 5.12-44 Grouper and the most recent resident assessments in calculating the CMIs used to establish resident care peer group prices and making the quarterly adjustments to the resident care rate components. In computing the resident care components of the proposed rates, the Department assumed these changes would also be adopted.

 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 2010-2011.¹ Based on the funding provided in the Governor's Executive Budget for FY 2010-2011, and assuming CMS approves SPA 09-018, the Department will apply a base BAF of 0.91280 in setting each nonpublic nursing facility's rates.² In calculating the proposed rates announced in this notice, the Department assumed that the General Appropriations Act of 2010 will include the level of funding in the Governor's Executive Budget and that CMS will approve SPA 09-018.

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. The Department will submit a SPA to CMS to include the BAF formula which the Department will use in FY 2010-2011. Based on the funding provided in the Governor's Executive Budget for FY 2010-2011, and assuming CMS approves this SPA, the Department will apply a BAF of 1.0097 in setting each county nursing facility's rate. In calculating the proposed rates for FY 2010-2011, the Department assumed that the General Appropriations Act of 2010 will include the level of funding in the Governor's Executive Budget and that CMS will approve the SPA including the BAF formula for FY 2010-2011.

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)).Since the implementation of the BAF, case-mix per diem rates have increased on an annual average basis by $5.30 per day and in the aggregate by 15.94% overall from FY 2004-2005 through FY 2009-2010. Based on the level of funding in the Governor's Executive Budget, the BAF for FY 2010-2011 for both nonpublic and county nursing facility rates would permit an additional aggregate increase in the State-wide day-weighted average case-mix per diem from the prior fiscal year.³

 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[.]'' For the reasons specified in the notice announcing our proposed rates for FY 2009-2010,⁴ the Department remains confident that the combination of the adjusted case-mix per diem rates and other supplemental payments authorized under our State Plan⁵ 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 the Commonwealth's nursing facilities.

 The proposed annual per diem rates for FY 2010-2011 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 the Commonwealth or by contacting Yvette Sanchez-Roberts, Department of Public Welfare, Office of Long-Term Living at [phone].

Fiscal Impact

 If the proposed payment rates are adopted as final, the rates will result in an estimated increased cost of $23.846 million ($8.013 million in State funds) for per diem rate payments to nonpublic nursing facilities and an estimated increased cost of $5.385 million ($1.809 million in State funds) for per diem rate payments for county nursing facilities' FY 2010-2011 rates compared to the facilities' proposed FY 2009-2010 per diem rates.

Public Comment

 Interested persons are invited to submit written comments regarding the proposed annual rates for FY 2010-2011 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-647. (1) General Fund; (2) Implementing Year 2010-11 is $9,822,000; (3) 1st Succeeding Year 2011-12 is $9,822,000; 2nd Succeeding Year 2012-13 is $9,822,000; 3rd Succeeding Year 2013-14 is $9,822,000; 4th Succeeding Year 2014-15 is $9,822,000; 5th Succeeding Year 2015-16 is $9,822,000; (4) 2009-10 Program—$540,266,000; 2008-09 Program—$672,597,000; 2007-08 Program—$692,585,000; (7) Long-Term Care; (8) recommends adoption. Funds have been included in the budget to cover this increase.

[Pa.B. Doc. No. 10-1181. Filed for public inspection June 25, 2010, 9:00 a.m.]

_______

¹  A detailed description of the proposed BAF formulas for FY 2010-2011 is contained in the August 15, 2009 notice published at 39 Pa.B. 4958, which is available online at http://www.pabulletin.com/secure/data/vol39/39-33/1477.html.

²  As specified in the August 15, 2009 notices, prior to establishing the April 2011 rate, the Department will compare the weighted average April rate to the April target rate. If the weighted average April rate is less than the April target rate and the difference is $.50 or more, the formula for the April BAF will be the April target rate divided by the weighted average April rate at 100Otherwise, the April BAF will be equal to the base BAF. See 39 Pa.B. 4958 (August 15, 2009).

³  The Department will recalculate the BAF once the General Assembly has enacted a General Appropriations Act for FY 2010-2011 and will include the BAF in its notice announcing final MA nursing facility payment rates for the rate-setting year.

⁴  The notice Payments to Nonpublic and County Nursing Facilities; Proposed Rates for State Fiscal Year 2009-2010 announcing the proposed rates for FY 2009-2010 appears in this issue at 40 Pa.B. at 3629 (June 26, 2010).

⁵  Currently, our approved State Plan authorizes quarterly supplemental payments to nonpublic nursing facilities that meet certain requirements. In FY 2010-2011, we estimate that the quarterly supplemental payments will equal $11.73 for each PA MA Day of Care rendered by a qualifying nursing facility. In addition, the Department intends to submit a SPA to authorize additional Enhanced Supplemental Payments to qualifying nonpublic nursing facilities in FY 2010-2011. A detailed description of these proposed payments will be available online at: www.dpw.state.pa.us/PartnersProviders/MedicalAssistance/DoingBusiness/LTCCaseMixInfo/.
 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 2010-2011. If CMS approves SPA 09-021, the MDOI payments will be approximately $14.05 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 in FY 2010-2011. The DSH payments range from $0.32 to $3.65 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).