Payments to Nonpublic Nursing Facilities; Final Rates for State Fiscal Year 2006-2007 [37 Pa.B. 5325]
[Saturday, September 29, 2007]Purpose of Notice
The purpose of this notice is to announce the Department of Public Welfare's (Department) final annual case-mix per diem payment rates for State Fiscal Year (FY) 2006-2007 for nonpublic nursing facilities that participate in the Medical Assistance (MA) Program.
As required by the case-mix payment methodology set forth in 55 Pa. Code Chapter 1187, Subchapter G (relating to rate setting), as amended at 36 Pa. B. 3207 (June 24, 2006), the Department annually sets a new MA per diem rate for each nonpublic nursing facility. Each facility's annual per diem rate is comprised of four components: resident care; other resident related; administrative; and capital.
Section 1187.96 (relating to price- and rate-setting computations) states that the sum of the rate components will be multiplied by a budget adjustment factor (BAF). The BAF is based on the funding that is appropriated for nursing facility services in the General Appropriations Act and ''will be determined in accordance with a formula specified in the Commonwealth's approved State Plan.'' See 36 Pa.B 3207 and 55 Pa. Code § 1187.96(e)(iv).
In September 2006, the Department submitted a proposed State Plan Amendment (SPA 06-08) to the Federal Centers for Medicare and Medicaid Services (CMS) that contained a multistep formula for computing the BAF for both FY 2006-2007 and FY 2007-2008 and that specified a BAF of 0.93755 for FY 2006-2007. CMS expressed concern that the SPA did not identify a particular numeric BAF for FY 2007-2008. To address CMS's concerns and to avoid further delay in the approval of the SPA and the issuance of nursing facility payment rates for FY 2006-2007, the Department revised the multistep formula in the SPA to apply only to FY 2006-2007 and simplified the formula to the following equation: (total appropriated funds allocated to nonpublic nursing facilities plus the estimated annual patient pay) divided by the estimated acuity adjusted annual payments of $3,048,667,339. These changes did not affect the BAF for FY 2006-2007 contained in the SPA; it remained as proposed: 0.93755. CMS approved SPA 06-08 with the modified formula and the FY 2006-2007 BAF effective July 1, 2006.
Subsequent to CMS's approval of the modified formula, the General Assembly enacted the act of June 30, 2007, P. L. 49, No. 16 (Act 16). Among other things, Act 16 amended section 443.1 of the Public Welfare Code (62 P. S. § 443.1). As amended, section 443.1(5) now provides: ''After June 30, 2004 and before June 30, 2007, payments to county and non-public nursing facilities enrolled in the medical assistance program as providers of nursing facility services shall be calculated and made as specified in the department's regulations in effect on July 1, 2003, except that if the Commonwealth's approved Title XIX State Plan for nursing facility services in effect for the period of July 1, 2004, through June 30, 2007, specifies a methodology for calculating county and non-public nursing facility payment rates that is different than the department's regulations in effect on July 1, 2003, the department shall follow the methodology in the Federally-approved Title XIX State Plan.'' See 62 P. S. § 443.1(5). As set forth previously, the Commonwealth's approved Title XIX State Plan in effect for the 2006-2007 rate year requires that a BAF will be used in the process of computing per diem rates for that rate year, and specifies that the BAF for nonpublic nursing facilities for the 2006-2007 rate year will be 0.93755. That BAF was used to compute the per diem rates announced herein, and those rates were computed in accordance with the State Plan and Act 16.
The final FY 2006-2007 annual per diem rates are available on the Office of Medical Assistance Programs' (OMAP) website at www.dpw.state.pa.us/omap. As they become available, the adjusted quarterly rates for the October, January and April quarters of FY 2006-2007 will be accessible on the OMAP website, at local county assistance offices throughout this Commonwealth or by contacting Tom Jayson, Policy Unit, Bureau of Long-Term Care Programs at (717) 705-3705.
The data that the Department used to calculate the rates is available on the OMAP's website. Because some of the audited costs used in the database are taken from audit reports for fiscal periods beginning prior to January 1, 2001, the Department revised the audited costs in the database in accordance with 55 Pa. Code § 1187.91 (1)(iv)(D) (relating to database) to disregard certain audit adjustments disallowing minor movable property or linen costs. The criteria that the Department used to make these revisions are available on the OMAP's website or by contacting Tom Jayson.
Public Process
The Department engaged in an extensive public process prior to July 1, 2006, to solicit input from interested parties on a variety of proposed changes to the case mix payment methodology, including the use of a BAF in the rate-setting process. In addition to publication of a detailed public notice in the Pennsylvania Bulletin announcing that it intended to amend its regulations and the State Plan to, among other things, ''apply a budget adjustment factor (BAF) based on the funding that is appropriated for nursing facility services in the General Appropriations Act . . . each quarter to the nursing facility's quarterly case-mix per diem rate,''1 the public process included discussions with the Long-Term Care subcommittee of the Medical Assistance Advisory Committee, multiple meetings with representatives of the four nursing home associations, and a series of public hearings throughout the Commonwealth at which the Department discussed and solicited public comment on its proposed changes, including the BAF. As a result of this process, the Department received thoughtful, substantive comments and recommendations from interested parties, including numerous comments relating to the BAF. See 36 Pa. B. 3209--3210; Chapters 1187 and 1189 Comment/Response Document, www.dpw.state.pa.us/omap/provinf/ltc/nsgfregcomresp.pdf.
After consideration of the public input received both at the public hearings and in response to its notice, the Department ultimately determined to proceed with more limited reforms. After sharing advance copies with both the nursing facility associations and legislative staff, the Department published final rules pursuant to Act 42-2005 amending its case-mix regulations on June 24, 2006. See 36 Pa.B. 3207--3220 (June 24, 2006). Among other things, the amendments provided for a BAF in FY 2006-2007 and FY 2007-2008. In explaining these amendments, the Department reiterated that the BAF would be ''based on the funding that is appropriated for nursing facility services in the General Appropriations Act and . . . determined in accordance with the formula specified in the Commonwealth's approved State Plan.'' Id., at 3208. Subsequently, and after additional discussions and exchange of advance copies with the associations, the Department submitted two State Plan Amendments (SPA 06-08 and SPA 06-09) to incorporate corresponding changes to the Commonwealth's approved Title XIX State Plan and the BAF formula. After some modifications, CMS approved both SPAs, and in doing so, effectively determined that that the Department complied with all applicable Federal requirements. See Presbyterian Medical Center of Oakmont v. Department of Public Welfare, 792 A.2d 23 (Pa. Cmwlth. 2002) and Centennial Spring Health Care Center v. Department of Public Welfare, 541 A.2d 806 (Pa. Cmwlth. 1988) (giving great deference to Federal approval in determining that State Plan provisions comply with applicable Federal law).
The Department published a notice announcing its proposed case-mix per diem payment rates for FY 2006-2007 at 36 Pa.B. 6474 (October 21, 2006) and again invited interested persons to submit comments. One commentator submitted a response to the notice. For the most part, the response reiterated the same concerns and objections that had been raised by the commentator and others during the extensive public process relating to the June 2006 rulemaking process.
In adopting the BAF and setting the final rates for FY 2006-2007, the Department considered all of the comments and input it received.
Appeals
Following publication of this notice, the Department will send rate letters to each MA nursing facility to notify the facilities of their final rates for FY 2006-2007. The rate letter will also advise each facility that it may file an administrative appeal if the facility believes that the Department made any errors or otherwise disagrees with its final rates for FY 2006-2007. A provider's appeal must be in writing and filed with the Department's Bureau of Hearings and Appeals, P. O. Box 2675, Harrisburg, PA 17105, within 33 days of the date of the Department's letter notifying the facility of its final rates. Facilities should refer to 67 Pa.C.S. Chapter 11 (relating to Medical Assistance hearings and appeals), and to the Department's regulations at 55 Pa. Code Chapter 41 (relating to Medical Assistance provider appeal procedures), for more detail regarding their appeal rights and the requirements related to their written appeals.
Fiscal Impact
The change in payment rates, effective July 1, 2006, and the quarterly case-mix adjustments were estimated to cost the Department $103.782 million ($47.164 million in State funds) in FY 2006-2007.
Public Comment
Interested persons are invited to submit written comments regarding this notice to the Department of Public Welfare, Bureau of Long-Term Care Programs, Attention Gail Weidman, P. O. Box 2675, Harrisburg, PA 17105. 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 AT&T Relay Services at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).
ESTELLE B. RICHMAN,
SecretaryFiscal Note: 14-NOT-526. (1) General Fund; (2) Implementing Year 2007-08 is $47,164,000; (3) 1st Succeeding Year 2008-09 is $54,452,000; 2nd Succeeding Year 2009-10 is $54,452,000; 3rd Succeeding Year 2010-11 is $54,452,000; 4th Succeeding Year 2011-12 is $54,452,000; 5th Succeeding Year 2012-13 is $54,452,000; (4) 2006-07 Program--$817,890,000; 2005-06 Program-- $476,116,000; 2004-05 Program--$588,528,000; (7) Medical Assistance--Long-Term Care; (8) recommends adoption. Funds have been included in the budget to cover these increases.
[Pa.B. Doc. No. 07-1813. Filed for public inspection September 28, 2007, 9:00 a.m.] _______
1 36 Pa.B. 1807 (April 15, 2006).
