Code of Maryland Regulations
Title 10 - MARYLAND DEPARTMENT OF HEALTH
Part 2
Subtitle 09 - MEDICAL CARE PROGRAMS
Chapter 10.09.10 - Nursing Facility Services
Section 10.09.10.08-1 - Rate Calculation - Administrative and Routine Costs for Rates Effective January 1, 2015

Universal Citation: MD Code Reg 10.09.10.08-1

Current through Register Vol. 51, No. 19, September 20, 2024

A. The Administrative and Routine cost center includes:

(1) Administrative expenses;

(2) Medical records expenses;

(3) Training expenses;

(4) Dietary;

(5) Laundry;

(6) Housekeeping;

(7) Operation and maintenance; and

(8) Capitalized organization and start-up costs.

B. The Department shall initially establish cost center prices for the rate period January 1, 2015 through June 30, 2015, and thereafter rebase the cost center prices between every 2 and 4 rate years. Prices may be rebased more frequently if the Department determines that there is an error in the data or in the calculation that results in a substantial difference in payment, or, if a significant change in provider behavior or costs has resulted in payment that is inequitable, across providers. The Department shall rebase based on the following steps:

(1) The price database shall be established using the most recent desk reviewed Nursing Home Uniform Cost Report for each current provider, or the immediately prior owner of that nursing facility, that is available 2 months before the period for which prices are being established or rebased;

(2) If no desk reviewed cost report is available, that provider shall be excluded from the price database;

(3) The total cost center expenses for each cost report in the price database shall be adjusted from the midpoint of each cost reporting period to the midpoint of the rate year for which the price is being established based on the following steps:
(a) A monthly market basket index shall be calculated based on the following calculations:

Market Basket Index Quarter

Assigned Month

Monthly Index

Quarter 1

January

33 percent of Quarter 4 prior year index plus 67 percent of Quarter 1 index

Quarter 1

February

100 percent of Quarter 1 index

Quarter 1

March

67 percent of Quarter 1 index plus 33 percent of Quarter 2 index

Quarter 2

April

33 percent of Quarter 1 index plus 67 percent of Quarter 2 index

Quarter 2

May

100 percent of Quarter 2 index

Quarter 2

June

67 percent of Quarter 2 index plus 33 percent of Quarter 3 index

Quarter 3

July

33 percent of Quarter 2 index plus 67 percent of Quarter 3 index

Quarter 3

August

100 percent of Quarter 3 index

Quarter 3

September

67 percent of Quarter 3 index plus 33 percent of Quarter 4 index

Quarter 4

October

33 percent of Quarter 3 index plus 67 percent of Quarter 4 index

Quarter 4

November

100 percent of Quarter 4 index

Quarter 4

December

67 percent of Quarter 4 index plus 33 percent of Quarter 1 next year index

(b) The index factor for each cost reporting period shall be calculated by dividing the index associated with the midpoint of the rate year by the index associated with the midpoint of the cost reporting period; and

(c) The indexed costs shall be calculated as total cost center expenses times the index factor;

(4) Each cost report's indexed Administrative and Routine costs shall be divided by the greater of total resident days or days at full occupancy times an occupancy standard calculated as the Statewide average occupancy, not including providers with occupancy waivers, plus 1.5 percent to arrive at the Administrative and Routine cost per diem; and

(5) For each reimbursement class, each cost report's Medicaid resident days shall be used in the array of Administrative and Routine cost per diems identified in §B(4) of this regulation to calculate the Administrative and Routine Medicaid day weighted median as follows:
(a) Array the Administrative and Routine cost per diems for each geographic region from low to high;

(b) For each Administrative and Routine cost per diem, identify the Medicaid days from the nursing facilities' cost reports;

(c) Calculate a cumulative Medicaid day total; and

(d) Identify the median Administrative and Routine cost per diem as the Administrative and Routine per diem associated with the cumulative Medicaid days that first equals or exceeds half the number of total Medicaid days for the geographic region.

C. The final price for Administrative and Routine costs for each reimbursement class shall be calculated as the geographic regional Medicaid day weighted median multiplied by 1.025.

D. For years between periods when the prices are rebased, the final cost center price shall be adjusted by the change in the indexes as calculated in §B(3) of this regulation that correspond to midpoint of the prior rate year to the midpoint of the new rate year.

E. The final Administrative and Routine rate for each nursing facility is the Administrative and Routine price for its reimbursement class.

F. The reimbursement classes for the Administrative and Routine cost center are specified under Regulation .24A of this chapter.

G. Kosher Kitchen Add-on.

(1) Nursing facilities that maintain kosher kitchens and have Administrative and Routine costs in excess of the Administrative and Routine price in their reimbursement class that are attributable to dietary expense shall receive an add-on to its final price in an amount up to 15 percent of the median per diem cost for dietary expense in its reimbursement class.

(2) For years between periods when the kosher kitchen add-ons are rebased, the kosher kitchen add-on shall be calculated as the prior year kosher kitchen add-on multiplied by the rate year monthly index divided by the prior year monthly index as identified in §B(3)(a) of this regulation.

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