Current through Register Vol. 46, No. 39, September 25, 2024
(a) Payment rates
shall be established on a prospective basis effective January 1, 1992 and each
January 1st thereafter, except that the rate of payment effective January 1,
2012 through December 31, 2012, and January 1, 2013 through December 31, 2013,
shall be a continuance of the rate of payment effective December 31, 2011, and
shall be provisional pending the completion of an audit in accordance with
section
577.6 of this
Part.
(b) Payment rates are
computed on a per diem basis by dividing allowable costs by allowable patient
days. Allowable patient days shall not exceed a maximum utilization of 98
percent of certified capacity. The allowable costs and patient days shall
include the cost of psychiatric inpatient and related ancillary services, and
as applicable, the cost of alcoholism inpatient and related ancillary
services.
(c) Allowable costs are
determined from hospital cost reports, as defined in section
577.5 of this
Part, subject to the following priority of definitions of allowable cost:
(1) this Part;
(2) allowable costs under Federal Medical
Assistance Program;
(3) allowable
cost under the Medicare Program;
(4) generally accepted accounting principles;
and
(5) as determined by audit in
accordance with section
577.6 of this
Part.
(d) For any rate
year, operating and capital costs are determined from the allowable costs in
the base year. The base year is the year two years prior to the rate
year.
(e) Operating costs from the
base year are subject to a cost limitation. The limitation is the allowable
costs one year prior to the base year, increased by inflation for one year.
(1) Allowable operating costs in the rate
year are calculated by choosing the lower of the base year cost computed on a
per diem basis or the limitation cost computed on a per diem basis, and
trending this amount forward two years by the inflation factor, except for the
rate period effective January 1, 2010 to December 31, 2010, when the inflation
factor used to trend costs will be limited to the inflation factor for the
first year of the two-year period, and the rate period effective January 1,
2014, to December 31, 2014, when there will be no inflation factor used to
trend costs. Administration costs, as contained in and part of operating costs,
shall be subject to an administrative cost screen. Two separate administrative
cost screens shall be calculated, one for hospitals with greater than 100 beds
(group one), and one for hospitals with 100 or less beds (group two). The
administrative cost screen is derived from the costs in the fiscal year one
year prior to the base year (i.e., the same cost year from which the limitation
is derived), and shall be the group average per diem cost plus 10
percent.
(2) The inflation factor
is the Medicare inflation factor for hospitals and units excluded from the
prospective payment system.
(f) Capital costs which are the allowed costs
from the base year, as defined in subdivision (d) of this section, are the
capital related costs as reported in the hospital financial reports. Interest
and depreciation costs associated with all asset acquisitions are subject to
approval under Part 551 of this Title. No capital expenditure for which
approval by the Office of Mental Health is required under the applicable
provisions of the Mental Hygiene Law or Part 551 of this Title shall be
included in allowable capital costs for purposes of computing a rate of payment
unless such approval shall have been secured. Capital costs are computed on a
per diem basis.
(g) Allowed days
are the patient days applicable to the costs for psychiatric and, if
applicable, alcoholism inpatient services, as defined in section
577.4(f)
of this Part.
(h) Payment rates for
new hospitals which have no prior cost experience from which to establish base
year costs and a cost limitation, as defined in subdivision (e) of this
section, shall be determined as follows:
(1)
Payment rates shall be for the time period as approved in a financial plan
submitted by the hospital and approved by the commissioner under Part 551 of
this Title.
(2) Allowed capital
costs during the period of the financial plan will be computed based upon the
approved budgeted capital costs, divided by the approved budgeted patient days
for the rate year, and retroactively adjusted to actual certified cost divided
by the higher of actual patient days or approved budgeted patient days. Capital
costs are subject to the provisions of subdivision (f) of this
section.
(3) Operating costs during
the period of the financial plan will be the lower of the approved budgeted
operating costs divided by the approved budgeted patient days or 110 percent of
the statewide weighted average of the operating cost per diem of all private
psychiatric hospitals for which the Office of Mental Health promulgates rates
of payment pursuant to this Part.
(4) The operating cost component of the rate
will be updated annually, except for the period January 1, 2010 to December 31,
2010, and the period January 1, 2014, to December 31, 2014, with the Medicare
inflation factor for hospitals and units excluded from the prospective payment
system, until the hospital has operated for six months at a minimum occupancy
level of at least 75 percent and files its first cost report for that same
period in accordance with section
577.5 of this
Part.
(5) The actual cost report
data will be used to establish the rate of payment for that hospital on a
retroactive basis to the period covered by the hospital cost report. If the
resulting rate of payment is higher than the per diem costs approved in the
financial plan, the hospital will continue on the budget based method described
in paragraphs (1)-(4) of this subdivision, until such time as the hospital
submits subsequent financial reports and the methodology in subdivision (e) of
this section can be applied.
