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 10.09.10.15-1 - New Nursing Facilities, Replacement Facilities, and Change of Ownership for Rates Effective January 1, 2015
Universal Citation: MD Code Reg 10.09.10.15-1
Current through Register Vol. 51, No. 19, September 20, 2024
A. The Department shall establish rates for new nursing facilities, replacement facilities, and nursing facilities with a change of ownership as outlined in §§B-D of this regulation.
B. New Nursing Facilities.
(1) Until such time as an
appraisal for the new facility is available as set forth in Regulation
.10-1B(1)(b) of this chapter, the fair rental value per diem rate shall be
based on the lower of the facility's construction costs plus the assessed land
value divided by the number of licensed beds, or the maximum appraised value
per bed in Regulation .10-1B(1)(g) of this chapter.
(2) A new nursing facility shall be assigned
the Statewide average Medicaid CMI until assessment data submitted by the
nursing facility is used in a quarterly rate determination.
(3) The nursing facility shall be assigned to
the appropriate geographic region, as specified under Regulation .24 of this
chapter, for purposes of assigning the Nursing Service rate, the Other Patient
Care price, and the Administrative and Routine price.
(4) The geographic region price for Nursing
Service costs shall be multiplied by the new nursing facility's Medicaid CMI
until there is a nursing facility cost report used in the rebasing
process.
(5) The fair rental value
per diem rate shall use days as the greater of total estimated resident days or
days at full occupancy times an occupancy standard calculated under Regulation
.08-1B(4) of this chapter and the maximum bed value identified in Regulation
.10-1B(1)(g) of this chapter.
(6)
Upon providing the real estate bills to the State which incorporate the new
construction at least 15 days before the start of operations or at least 15
days before the beginning of any calendar quarter, the real estate tax per diem
rate shall be calculated in accordance with Regulation .10-1B(1)(l) of this
chapter. This amount shall be used for the period from the time of submission
until the next facility cost report is filed. For the period of time the
facility is operating under a waiver of occupancy granted in accordance with
Regulation .16-1F of this chapter, the real estate tax per diem rate shall be
calculated using estimated resident days. At the completion of the waiver
period, either the State or the facility may initiate a settlement payment
should the estimate vary from the actual by more than 10 percent.
(7) For the first 2 State fiscal rate setting
years, or portions thereof, new nursing facilities that are required to pay an
assessment in accordance with COMAR
10.01.20.02 shall receive a
Quality Assessment add-on calculated as follows:
(a) Estimate the assessed days to be reported
on the Nursing Facility Quality Assessment Payment Reporting Forms for the
quarters covering the upcoming State fiscal rate setting year or portion
thereof;
(b) Multiply the estimated
assessed days by the assessment rate anticipated for the rate quarters;
and
(c) Divide the total estimated
assessed amount by the sum of the total estimated patient days. At the
completion of either of these first two rate setting periods, either the State
or the facility may initiate a settlement payment should the estimates vary
from the actual by more than 10 percent.
C. Replacement Facilities.
(1) Until such time as an appraisal for the
replacement facility is available as set forth in Regulation .10-1B(1)(b) of
this chapter, the fair rental value per diem rate shall be based on the lower
of the facility's construction costs plus the assessed land value divided by
the number of licensed beds, or the maximum appraised value per bed in
Regulation .10-1B(1)(g) of this chapter.
(2) The fair rental value per diem rate shall
use days as the greater of total estimated resident days or days at full
occupancy times an occupancy standard calculated as the Statewide average under
Regulation .08-1B(4) of this chapter.
(3) Upon providing the real estate bills to
the State, which incorporate the new construction, at least 15 days before the
start of operations or at least 15 days before the beginning of any calendar
quarter, the real estate tax per diem rate shall be calculated in accordance
with Regulation .10-1B(1)(l) of this chapter. This amount shall be used for the
period from the time of submission until the next facility cost report is
filed. For the period of time the facility is operating under a waiver of
occupancy granted in accordance with Regulation .16-1F of this chapter, the
real estate tax per diem rate shall be calculated using estimated resident
days. At the completion of the waiver period either the State or the facility
may initiate a settlement payment should the estimate vary from the actual by
more than 10 percent.
(4) The
replacement facility fair rental value rate shall be effective beginning on the
date the replacement facility meets the requirements in Regulations .02 and .03
of this chapter.
(5) Except for the
fair rental value portion of the Capital rate, the replacement facility shall
be paid exactly as the original facility.
(6) The replacement facility rates shall be
based on the original facility's average Medicaid case mix index and cost
report costs.
D. Change of Ownership.
(1) Except when the Program
agrees to a shorter notification period, when there is an anticipated change of
ownership of a provider, not less than 30 days before the date of the change of
ownership:
(a) The provider shall:
(i) Notify the Program of the anticipated
change of ownership; and
(ii) If
the provider has not filed for bankruptcy, post an indemnity bond or a standby
letter of credit, or provide assurance satisfactory to the Program that the
purchaser shall assume and be responsible for all financial obligations of the
existing provider; and
(b) The purchaser shall:
(i) Notify the Program of the intent to
engage in a change of ownership and the desire to enroll in the
Program;
(ii) Submit a provider
application and execute a provider agreement with the Department before being
assigned new interim per diem rates; and
(iii) If the provider has filed for
bankruptcy, post an indemnity bond or a standby letter of credit, or provide
some assurance satisfactory to the Program that the purchaser shall assume and
be responsible for all financial obligations of the existing
provider.
(2)
Indemnity Bond or Standby Letter of Credit.
(a) The indemnity bond or standby letter of
credit required by §D(1)(a)(ii) or (b)(iii) of this regulation shall be in
the amount of:
(i) 10 percent of the Program
billings for each unsettled fiscal period prior to January 1, 2015
outstanding;
(ii) All unpaid
amounts due and owing the Program for each settled fiscal period before January
1, 2015;
(iii) 5 percent of the
Program billings for the most recent annual fiscal period; and
(iv) All debt owed by the provider to the
Interim Working Capital Fund under Regulation .07-1 of this chapter.
(b) The indemnity bond or standby
letter of credit obligation under §D(2)(a) of this regulation shall remain
in effect until all financial liabilities are resolved.
(c)
If a court of competent jurisdiction discharges the debt of a bankrupt
provider, the Program shall release to the purchaser the difference between the
indemnity bond or standby letter of credit required under §D(1)(b)(iii) of
this regulation and the amount of the financial obligation discharged by the
court.
(3) The purchaser
shall submit a provider application and execute a provider agreement with the
Department before being assigned a prospective rate.
(4) The new owner shall assume the old
owner's facility average Medicaid case mix index and cost reports.
(5) The new owner shall be paid at the same
rates as the old nursing facility provider except for the period of time the
facility is operating under a waiver of occupancy granted in accordance with
Regulation .16-1F of this chapter in which the rate shall be calculated using
estimated resident days. At the completion of the waiver period either the
State or the facility may initiate a settlement payment should the estimate
vary from the actual by more than 10 percent.
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