Current through Register Vol. 35, No. 18, September 24, 2024
Prospective per diem rates will be established as follows and
will be the lower of the amount calculated using the following formulas, or any
applicable ceiling:
A. Base year:
(1) For implementation year one (effective
September 1, 1990), the providers base year will be for cost reports filed for
base year periods ending no later than June 30, 1990. Since these cost reports
will not be audited at the time of implementation, an interim rate will be
calculated and once the audited cost report is settled, a final prospective
rate will be determined. Retrospective settlements of over or under payments
resulting from the use of the interim rate will be made.
(2) Re-basing of the prospective per diem
rate will take place every three years. Therefore, the operating years under
this plan will be known as year one, year two, and year three. Since rebasing
is done every three years, operating year four will again become year
one.
(3) Costs incurred, reported,
audited or desk reviewed for the provider's last fiscal year which falls in the
calendar year prior to year one will be used to re-base the prospective per
diem rate. Re-basing costs in excess of one hundred and ten percent of the
previous year's reported cost per diem times the index (as described further on
in these regulations) will not be recognized for calculation of the base year
costs.
B. Inflation
factor to recognize economic conditions and trends during the time period
covered by the facility's prospective per diem rate. Pursuant to budget
availability and at the HCA's discretion, an inflation factor may be used to
recognize economic conditions and trends. A notice will be sent out every
September informing each provider that:
(1)
MBI will or will not be authorized for determining rates for the year;
and
(2) the percentage increase if
the MBI is authorized;
(3) if
utilized, the index used to determine the inflation factor will be the center
for medicare and medicaid services (CMS) market basket index (MBI);
(4) each provider's operating costs will be
indexed to a mid-year point of February 28 for operating year 1;
(5) if utilized, the inflation factor will be
the actual MBI for the previous calendar year.
C. Incentive to reduce increases in cost:
(1) As an incentive to reduce the increases
in the administrative and general (A&G) and room and board (R&B) cost
center, the HCA will share with the provider the savings below the
A&G/R&B ceiling in accordance with the formula described below:
A = [1/2 (B-C)] < $1.00
(2) Where:
A = allowable Incentive per diem
B = A&G/R&B ceiling per diem
C = allowable A&G/R&B per diem from the base year's
cost report
D.
Cost centers for rate calculation: For the purpose of rate calculation, costs
will be grouped into four major cost centers. These are:
(1) direct patient care (DPC)
(2) administration and general
(A&G)
(3) room and board
(R&B)
(4) facility costs
(FC)
E. Case-mix
adjustment:
(1) In assuring the prospective
reimbursement system addresses the needs of residents of ICF-MR facilities, a
case mix adjustment factor will be incorporated into the reimbursement system.
The case-mix index (CMI) will be used to adjust the reimbursement levels in the
direct patient care cost center. The key objective of the CMI is to link
reimbursement to the acuity level of residents in a facility. To accomplish
this objective, the HCA utilizes level of care criteria which classify ICF-MR
residents into one of three levels, with level I representing the highest level
of need. Corresponding to each level of care, the relative values are as
follows:
|
level I |
1.077 |
|
level II |
0.953 |
|
level III |
0.768 |
(2)
Using these level specific relative values, a provider specific base year CMI
will be calculated. The CMI represents the weighted average of the residents'
level of care divided by the total number of residents in the facility. The CMI
is calculated as follows:
[(A x 1.077)+(B x .953)+(C x .768)]/N = CMI
(3) WHERE: A = number of level I residents
B = number of level II residents
C = number of level III residents
N = total number of provider's residents
F. Calculation of the prospective
per diem rate:
(1) A prospective per diem rate
for each of the three levels of ICF-MR classification will be determined for
each provider. Payment will be made based on the rate for the level of
classification of the recipient.
(2) The provider's direct patient care (DPC)
allowable cost will be divided by the provider's CMI to determine the cost at a
value of 1.00 for the base year. The adjusted DPC is then multiplied by the
relative value of the level of classification to determine the DPC component of
the rate. To this, will be added the allowable A & G and R & B amount
and the allowable facility cost. The formula for the rates will be as
follows:
(3) The formula for year
one is: (A1 x RV) + C1 + D + E = PR (year 1)
(4) The formula for year two is: [(A1 x RV) +
C1) x (1 + MBI)] + D + E = PR (year 2)
(5) The formula for year three is: [(A2 x RV)
+ C2) x (1 + MBI)] + D + E = PR (year 3)
(6) Where:
A = allowable DPC per diem adjusted to a value of 1.00
B = the relative value of the level of classification.
C = allowable A&G and R&B per diem
D = allowable incentive per diem
E = allowable facility cost per diem
MBI = market basket index
PR = prospective rate
RV = the relative value for the level
"1"= the numerical subscript means the date of the data used
in the formula; for example, "A1" means the base direct patient care costs
established in the base year, while "A2" would refer to the base direct patient
care costs adjusted by the MBI.
G. Effective dates of prospective rates:
Rates will be effective September 1 of each year for each facility.
H. Calculation of rates for existing
providers that do not have actuals as of June 30, 1990, and for new providers
entering the program after September 1, 1990. For existing and for new
providers entering the program that do not have actuals, the provider's interim
prospective per diem rate will become the sum of:
(1) the state wide average patient care cost
per diem for each level plus;
(2)
the A&G and R&B ceiling per diem plus;
(3) facility cost per diem as determined by
using the medicare principles of reimbursement;
(4) after six months of operation or at the
provider's fiscal year end, whichever comes later, the provider will submit a
completed cost report; this will be audited to determine the actual allowable
and reasonable cost for the provider; a final prospective rate will be
established at that time, and retroactive settlement will take place.
I. Changes of provider by sale of
an existing facility: When a change of ownership occurs, the provider's
prospective rate per diem will become the sum of:
(1) the patient care cost per diem for each
level, established for the previous owner plus;
(2) the A&G and R&B per diem
established for the previous owner; plus
(3) allowable facility costs determined by
using the medicare principles of reimbursement.
J. Changes of ownership by lease of an
existing facility: When a change of ownership occurs, the provider's
prospective per diem rate will become the sum of:
(1) the patient care cost per diem for each
level established for the previous owner; plus
(2) the A&G and R&B per diem
established for the previous owner; plus
(3) the lower of allowable facility cost or
the ceiling on lease cost as described by this plan.
K. Sale/leaseback of and existing facility:
When a sale/ leaseback of an existing facility occurs, the provider's
prospective rate will remain the same as before the
transaction.
