North Dakota Administrative Code
Title 75 - Department of Human Services
Article 75-03 - Community Services
Chapter 75-03-20 - Ratesetting for Residential Treatment Centers for Children
Section 75-03-20-04 - Ratesetting

Universal Citation: ND Admin Code ยง 75-03-20-04

Current through Supplement No. 394, October, 2024

1. The established rate is based on prospective ratesetting procedures. The establishment of a rate begins with historical costs. Adjustments are then made for claimed costs which are not includable in allowable costs. Adjustment factors are then applied to allowable costs. No retroactive settlements for actual costs incurred during the rate year which exceed the final rate will be made unless specifically provided for in this chapter.

2. Desk audit rate.

a. The department will establish desk rates for maintenance and rehabilitation, based on the cost report, which will be effective the first day of the seventh month following the center's fiscal yearend.

b. The desk rates will continue in effect until final rates are established.

c. The cost report will be reviewed taking into consideration the prior year's adjustments. Centers will be notified by telephone or mail of any desk adjustments based on the desk review. Within seven working days after notification, the center may submit information to explain why a desk adjustment should not be made. The department will review the submitted information, make appropriate adjustments, including adjustment factors, and issue the desk rates.

d. No reconsideration will be given by the department for the desk rates unless the center has been notified that the desk rates are the final rates.

3. Final rate.

a. The cost report may be field audited to establish final rates. If no field audit is performed, the desk rates will become the final rates upon notification to the center from the department.

b. The final rate for rehabilitation will be effective beginning the first day of the seventh month following the center's fiscal yearend.

c. The final rate for maintenance will be effective beginning the first day of the month in which notification of the rate is given to the center. There will be no retroactive adjustments to the beginning of the rate year for any increase or decrease in the maintenance rate.

d. The final rate will include any adjustments for nonallowable costs, errors, or omissions that result in a change from the desk rate of at least five cents per day.

e. Adjustments, errors, or omissions which are found after a final rate has been established will be included as an adjustment in the report year that the adjustments, errors, or omissions are found.

4. Special rates.

a. Centers providing services for the first time.
(1) Rates for a center which is providing services which are purchased by the department will be established using the following methodology for the first two fiscal years of the center if such period is less than twenty-four months.
(a) The center must submit a budget for the first twelve months of operation. A final rate will be established for a rate period which begins on the first of the month in which the center begins operation. This rate will remain in effect for eighteen months. No adjustment factors will be included in the first year final rate.

(b) Upon completion of the first twelve months of operation, the center must submit a cost report for the twelve-month period regardless of the fiscal yearend of the center.
1 The twelve-month cost report is due on or before the last day of the third month following the end of the twelve-month period.

2 The twelve-month cost report will be used to establish a rate for the remainder of the second rate year. Appropriate adjustment factors will be used to establish the rate.

(2) The center must submit a cost report which will be used to establish rates in accordance with subsections 2 and 3 after the center has been in operation for the entire twelve months of the center's fiscal year.

b. Centers changing ownership.
(1) For centers changing ownership, the rate established for the previous owner will be retained until the end of the rate year in which the change occurred.

(2) The rate for the second rate year after a change in ownership occurs will beestablished as follows:
(a) For a center with four or more months of operation under the new ownership during the report year, a cost report for the period since the ownership change occurred will be used to establish the rate for the next rate year.

(b) For a center with less than four months of operation under the new ownership in the reporting year, the prior report year's costs as adjusted for the previous owner will be indexed forward using appropriate adjustments.

c. Centers having a capacity increase or major renovation or construction.
(1) For centers which increase licensed capacity by twenty percent or more or have renovation or construction projects in excess of fifty thousand dollars, the rate established for the rate year in which the licensed increase occurs or the construction or renovation is complete may be adjusted to include projected property costs. The adjusted rate will be calculated based on a rate for historical costs, exclusive of property costs, as adjusted, divided by historical census, plus a rate for property costs based on projected property costs divided by projected census. The established rate for rehabilitation, including projected property costs, will be effective on the first day of the month in which the renovation or construction is complete or when the capacity increase is approved if no construction or renovation is necessary. The established rate for maintenance including projected property costs will be effective on the first of the month in which notification of the rate is given to the center.

(2) For the rate year immediately following the rate year in which the capacity increase occurred or construction and renovation was completed, a rate will be established based on historical costs, exclusive of property costs, as adjusted for the report year, divided by reported census plus a rate for property costs, based on projected property costs, divided by projected census.

d. Centers that have changes in services or staff.
(1) The department may provide for an increase in the established rate for additional costs that are necessary to add services or staff to the existing program.

(2) The center must submit information to the division of mental health services supporting the request for the increase in the rate. Information must include a detailed listing of new or additional staff or costs associated with the increase in services.

(3) The department will review the submitted information and may request additional documentation or conduct onsite visits. If an increase in costs is approved, the established rate will be adjusted. The effective date of the rate increase will be on the first of the month following approval by the department. The adjustment will not be retroactive to the beginning of the rate year.

(4) For the rate year immediately following a rate year in which a rate was adjusted under paragraph 3, the center may request that consideration be given to additional costs. The center must demonstrate to the department's satisfaction that historical costs do not reflect twelve months of actual costs of the additional staff or added services in order to adjust the rate for the second rate year. The additional costs would be based on a projection of costs for the remainder of a twelve-month period.

5. The final rate must be considered as payment for all accommodations which include items identified in section 75-03-20-06. For any client whose rate is paid in whole or in part by the department, no payment may be solicited or received from the client or any other person to supplement the rate as established.

6. For a center terminating its participation in the program, whether voluntarily or involuntarily, the department may authorize the center to receive continued payment until clients can be relocated.

7. Limitations.

a. The department may accumulate and analyze statistics on costs incurred by the centers. These statistics may be used to establish reasonable ceiling limitations and incentives for efficiency and economy based on reasonable determination of standards of operations necessary for efficient delivery of needed services. These limitations and incentives may be established on the basis of cost of comparable centers and services and may be applied as ceilings on the overall costs of providing services or on specific areas of operations. Limitations and incentives are effective upon notification of a center by the department.

b. Allowable administration costs to be included in the maintenance and rehabilitation rates are the lesser of the actual cost of administration as allocated to the cost category or an amount equal to fifteen percent of the allowable costs for the cost category.

8. Adjustment factors. Adjustment factors may be applied to adjust historical costs. The department shall annually determine an appropriate adjustment factor to be applied to allowable costs exclusive of property costs.

General Authority: NDCC 25-03.2-10, 50-06-16

Law Implemented: NDCC 25-03.2

Disclaimer: These regulations may not be the most recent version. North Dakota may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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