Indiana Administrative Code
Title 405 - OFFICE OF THE SECRETARY OF FAMILY AND SOCIAL SERVICES
Article 1 - MEDICAID PROVIDERS AND SERVICES
Rule 14.6 - Rate-Setting Criteria for Nursing Facilities
Section 14.6-7 - Inflation adjustment; minimum occupancy level; case mix indices
Current through March 20, 2024
Authority: IC 12-15-1-10; IC 12-15-21-2
Affected: IC 12-13-7-3; IC 12-15-13-6
Sec. 7.
(a) For purposes of determining the average allowable cost of the median patient day and a provider's annual rate review, each provider's cost from the most recent completed year will be adjusted for inflation by the office using the methodology in this subsection. All allowable costs of the provider, except for mortgage interest on facilities and equipment, depreciation on facilities and equipment, rent or lease costs for facilities and equipment, and working capital interest shall be adjusted for inflation using the CMS Nursing Home without Capital Market Basket index as published by IHS. The inflation adjustment shall apply from the midpoint of the annual financial report period to the midpoint prescribed as follows:
Effective Date |
Midpoint Quarter |
January 1, Year 1 |
July 1, Year 1 |
April 1, Year 1 |
October 1, Year 1 |
July 1, Year 1 |
January 1, Year 2 |
October 1, Year 1 |
April 1, Year 2 |
(b) Notwithstanding subsection (a), beginning July 1, 2019, the inflation adjustment determined as prescribed in subsection (a) shall be reduced by an inflation reduction factor equal to three and three-tenths percent (3.3%). The resulting inflation adjustment shall not be less than zero (0). Any reduction or elimination of the inflation reduction factor shall be made effective no earlier than permitted under IC 12-15-13-6(a).
(c) In determining prospective allowable costs for a new provider that has undergone a change of provider ownership or control through an arm's-length transaction between unrelated parties, when the first fiscal year end following the change of provider ownership or control is less than six (6) full calendar months, the previous provider's most recently completed annual financial report used to establish a Medicaid rate for the previous provider shall be utilized to calculate the new provider's first annual rate review. The inflation adjustment for the new provider's first annual rate review shall be applied from the midpoint of the previous provider's most recently completed annual financial report period to the midpoint prescribed under subsection (a).
(d) Allowable fixed costs per patient day for direct care, indirect care, and administrative costs shall be computed based on the following minimum occupancy levels:
(e) Notwithstanding subsection (d), the office shall reestablish a provider's Medicaid rate effective on the first day of the quarter following the date that the conditions specified in this subsection are met, by applying all provisions of this rule, except for the applicable minimum occupancy requirement described in subsection (d), if both of the following conditions can be established to the satisfaction of the office:
(f) Allowable fixed costs per patient day for capital-related costs shall be computed based on an occupancy rate equal to the greater of ninety-five percent (95%) or the provider's actual occupancy rate from the most recently completed historical period.
(g) Except as provided for in subsection (h), the CMIs contained in this subsection shall be used for purposes of determining each resident's CMI used to calculate the facility-average CMI for all residents and the facility-average CMI for Medicaid residents.
RUG - IV Group |
RUG - IV Code |
CMI Table |
Extensive Services |
ES3 |
3.00 |
Extensive Services |
ES2 |
2.23 |
Extensive Services |
ES1 |
2.22 |
Rehabilitation |
RAE |
1.65 |
Rehabilitation |
RAD |
1.58 |
Rehabilitation |
RAC |
1.36 |
Rehabilitation |
RAB |
1.10 |
Rehabilitation |
RAA |
0.82 |
Special Care High |
HE2 |
1.88 |
Special Care High |
HE1 |
1.47 |
Special Care High |
HD2 |
1.69 |
Special Care High |
HD1 |
1.33 |
Special Care High |
HC2 |
1.57 |
Special Care High |
HC1 |
1.23 |
Special Care High |
HB2 |
1.55 |
Special Care High |
HB1 |
1.22 |
Special Care Low |
LE2 |
1.61 |
Special Care Low |
LE1 |
1.26 |
Special Care Low |
LD2 |
1.54 |
Special Care Low |
LD1 |
1.21 |
Special Care Low |
LC2 |
1.30 |
Special Care Low |
LC1 |
1.02 |
Special Care Low |
LB2 |
1.21 |
Special Care Low |
LB1 |
0.95 |
Clinically Complex |
CE2 |
1.39 |
Clinically Complex |
CE1 |
1.25 |
Clinically Complex |
CD2 |
1.29 |
Clinically Complex |
CD1 |
1.15 |
Clinically Complex |
CC2 |
1.08 |
Clinically Complex |
CC1 |
0.96 |
Clinically Complex |
CB2 |
0.95 |
Clinically Complex |
CB1 |
0.85 |
Clinically Complex |
CA2 |
0.73 |
Clinically Complex |
CA1 |
0.65 |
Behavior / Cognitive |
BB2 |
0.81 |
Behavior / Cognitive |
BB1 |
0.75 |
Behavior / Cognitive |
BA2 |
0.58 |
Behavior / Cognitive |
BA1 |
0.53 |
Reduced Physical Function |
PE2 |
1.25 |
Reduced Physical Function |
PE1 |
1.17 |
Reduced Physical Function |
PD2 |
1.15 |
Reduced Physical Function |
PD1 |
1.06 |
Reduced Physical Function |
PC2 |
0.91 |
Reduced Physical Function |
PC1 |
0.85 |
Reduced Physical Function |
PB2 |
0.70 |
Reduced Physical Function |
PB1 |
0.65 |
Reduced Physical Function |
PA2 |
0.49 |
Reduced Physical Function |
PA1 |
0.45 |
Delinquent |
BC1 |
0.43 |
(h) In place of the CMIs contained in subsection (g), the CMIs contained in this subsection shall be used for purposes of determining the facility-average CMI for Medicaid residents that meet all the following conditions:
RUG-IV Group |
RUG-IV Code |
CMI Table |
Reduced Physical Functions |
PB2 |
0.29 |
Reduced Physical Functions |
PB1 |
0.28 |
Reduced Physical Functions |
PA2 |
0.21 |
Reduced Physical Functions |
PA1 |
0.19 |
(i) The office shall provide each nursing facility with the following:
The preliminary report will be provided by the twenty-fifth day of the first month following the end of a calendar quarter.
(j) The office will increase Medicaid reimbursement to nursing facilities that provide inpatient services to more than eight (8) ventilator-dependent residents. Additional reimbursement shall be made to the facilities at a rate of eleven dollars and fifty cents ($11.50) per Medicaid resident day. The additional reimbursement shall:
(k) Through June 30, 2019, the office will increase Medicaid reimbursement to nursing facilities that provide specialized care to Medicaid residents with Alzheimer's disease or dementia, as demonstrated by resident assessment data as of December 31 of each year. Medicaid Alzheimer's and dementia residents shall be determined to be in the SCU based on an exact match of room numbers reported on Schedule Z with the room numbers reported on resident assessments and tracking forms. Resident assessments and tracking forms with room numbers that are not an exact match to the room numbers reported on Schedule Z will be excluded in calculating the number of Medicaid Alzheimer's and dementia resident days in their SCU. Resident days used in this calculation shall be based on the time-weighted days from the final CMI reports utilizing MDS assessments. The additional Medicaid reimbursement shall equal twelve dollars ($12) per Medicaid Alzheimer's and dementia resident day in their SCU. Only facilities that meet the definition for a SCU for Alzheimer's disease or dementia shall be eligible to receive the additional reimbursement. The additional Medicaid reimbursement shall be effective July 1 of the next state fiscal year.
(l) Through June 30, 2019, the office will increase Medicaid reimbursement to nursing facilities to encourage improved quality of care to residents based on each facility's total quality score. For purposes of determining the nursing facility quality rate add-on, each facility's total quality score will be determined annually. Each nursing facility's quality rate add-on shall be determined as follows:
Nursing Facility Total Quality Score |
Nursing Facility Quality Rate Add-On |
0 - 18 |
$0 |
19 - 83 |
$14.30-((84 - Nursing Facility Total Quality Score) × 0.216667) |
84 - 100 |
$14.30 |
(m) Each nursing facility shall be awarded no more than one hundred (100) quality points as determined by the following eight (8) quality measures:
Nursing Home Report Card Scores |
Quality Points Awarded |
0 - 82 |
75 |
83 - 265 |
Proportional quality points awarded as follows: 75 - [(facility report card score - 82) × 0.407609] |
266 and above |
0 |
Facilities that did not have a nursing home report card score published as of June 30, 2013, or each June 30 thereafter, shall be awarded the statewide average quality points for this measure.
Normalized Weighted Average Nursing Hours Per Resident Day |
Quality Points Awarded |
Less than or equal to 3.315 |
0 |
Greater than 3.315 and less than 4.401 |
Proportional quality points awarded as follows: 10 - [(4.401 - facility's normalized weighted average nursing hours per resident day) × 9.208103] |
Equal to or greater than 4.401 |
10 |
Facilities that are a new operation and did not have a normalized weighted average nursing hours per resident day from the most recently completed annual financial report as of June 30, 2013, or each June 30 thereafter, shall be awarded the statewide average quality points for this measure.
Total Number of RN/LPN Employees Employed at the Beginning of the Year that are still
Each nursing facility shall be awarded no more than three (3) quality points based on the facility's RN/LPN retention rate. Quality points shall be determined using each nursing facility's most recently completed Schedule X as of March 31, 2013, and each March 31 thereafter. Each nursing facility's quality points under this subdivision shall be determined as follows:
Nursing Facility's RN/LPN Retention Rates |
Quality Points Awarded |
Less than or equal to 58.3% |
0 |
Greater than 58.3% and less than 83.3% |
Proportional quality points awarded as follows: - [(83.3% - facility's annual RN/LPN retention rate) × 12] |
Equal to or greater than 83.3% |
3 |
Facilities that are a new operation and did not have RNs/LPNs for the entire calendar year preceding March 31, 2013, or each March 31 thereafter, shall be awarded the statewide average quality points for this measure. Facilities that did not submit a Schedule X as of March 31 shall receive zero (0) quality points for this measure.
Each nursing facility shall be awarded no more than three (3) quality points based on the facility's CNA retention rate. Quality points shall be determined using each nursing facility's most recently completed Schedule X as of March 31, 2013, and each March 31 thereafter. Each nursing facility's quality points under this subdivision shall be determined as follows:
Nursing Facility's CNA Retention Rates |
Quality Points Awarded |
Less than or equal to 49.5% |
0 |
Greater than 49.5% and less than 76.0% |
Proportional quality points awarded as follows: 3 - [(76.0% - facility's annual CNA retention rate) × 11.320755] |
Equal to or greater than 76.0% |
3 |
Facilities that are a new operation and did not have CNAs for the entire calendar year preceding March 31, 2013, or each March 31 thereafter, shall be awarded the statewide average quality points for this measure. Facilities that did not submit a Schedule X as of March 31 shall receive zero (0) quality points for this measure.
Each nursing facility shall be awarded not more than one (1) quality point based on the facility's RN/LPN turnover rate. Quality points shall be determined using each nursing facility's most recently completed Schedule X as of March 31, 2013, and each March 31 thereafter. Each nursing facility's quality points under this subdivision shall be determined as follows:
Nursing Facility's Annual RN/LPN Turnover Rate |
Quality Points Awarded |
Less than or equal to 26.1% |
1 |
Greater than 26.1% and less than 71.4% |
Proportional quality points awarded as follows: 1 - [(26.1% - facility's annual RN/LPN turnover rate) × (-2.207506)] |
Equal to or greater than 71.4% |
0 |
Facilities that are a new operation and did not have RNs/LPNs for the entire calendar year preceding March 31, 2013, or each March 31 thereafter, shall be awarded the statewide average quality points for this measure. Facilities that did not submit a Schedule X as of March 31 shall receive zero (0) quality points for this measure.
Each nursing facility shall be awarded no more than two (2) quality points based on the facility's CNA turnover rate. Quality points shall be determined using each nursing facility's most recently completed Schedule X as of March 31, 2013, and each March 31 thereafter. Each nursing facility's quality points under this subdivision shall be determined as follows:
Nursing Facility Annual CNA Turnover Rates |
Quality Points Awarded |
Less than or equal to 39.4% |
2 |
Greater than 39.4% and less than 96.2% |
Proportional quality points awarded as follows: 2 - [(39.4% - facility's annual CNA turnover rate) × (-3.521127)] |
Equal to or greater than 96.2% |
0 |
Facilities that are a new operation and did not have a CNA for the entire calendar year preceding March 31, 2013, or each March 31 thereafter, shall be awarded the statewide average quality points for this measure. Facilities that did not submit a Schedule X as of March 31 shall receive zero (0) quality points for this measure.
Number of Administrators Employed Within the Last Five (5) Years |
Quality Points Awarded |
6 or more |
0 |
5 |
1 |
4 |
2 |
3 or fewer |
3 |
Facilities that did not have a facility administrator employed or designated for the previous five (5) years shall be awarded the statewide average quality points for this measure. Facilities that did not submit a Schedule X as of March 31 shall receive zero (0) quality points for this measure.
Number of DONs Employed Within the Last Five (5) Years |
Quality Points Awarded |
6 or more |
0 |
5 |
1 |
4 |
2 |
3 or fewer |
3 |
Facilities that did not have a facility DON employed or designated for the previous five (5) years shall be awarded the statewide average quality points for this measure. Facilities that did not submit a Schedule X as of March 31 shall receive zero (0) quality points for this measure.