§ 40-8-19 Rates of payment to nursingfacilities. – (1) The rates to be paid by the state to nursing facilities licensed pursuantto chapter 17 of title 23, and certified to participate in the Title XIXMedicaid program for services rendered to Medicaid-eligible residents, shall bereasonable and adequate to meet the costs which must be incurred by efficientlyand economically operated facilities in accordance with 42 U.S.C. §1396a(a)(13). The department of human services shall promulgate or modify theprinciples of reimbursement for nursing facilities currently in effect on July1, 2003 to be consistent with the provisions of this section and Title XIX, 42U.S.C. § 1396 et seq., of the Social Security Act.
(2) The department of human services shall review the currentmethodology for providing Medicaid payments to nursing facilities, includingother long-term care services providers, and is authorized to modify theprinciples of reimbursement to provide for an acuity based rate adjustment tonursing facilities. The department of human services is authorized to implementchanges to the payment structure for the purpose of basing compensation forMedicaid services to nursing facilities and long term care service providersfor services which shall be based upon performance, quality, and the scope andthe intensity of the services required by the provider to meet the Medicaidrecipient's level of care needs. The acuity based rate adjustment shall takeeffect on January 15, 2010, provided the Department of Human Services has heldpublic hearings and submitted the final implementation plan to the Chairpersonsof the House and Senate Finance Committees no later than December 1, 2009.
(b) Rate reform. Subject to the phase-in provisions insubsections (c) and (d), the department shall, on or before October 1, 2005,modify the principles of reimbursement for nursing facilities to include thefollowing elements:
(1) Annual base years;
(2) Four (4) cost centers: direct labor, property, otheroperating, and pass through items;
(3) Re-array of costs of all facilities in the labor andother operating cost centers every three (3) years beginning with calendar year2002;
(4) A ceiling maximum for allowable costs in the direct laborcost center to be established by the department between one hundred ten percent(110%) and one hundred twenty-five percent (125%) of the median for allfacilities for the most recent array year.
(5) A ceiling maximum for allowable costs in the otheroperating cost center to be established by the department between ninetypercent (90%) and one hundred fifteen percent (115%) of the median for allfacilities for the most recent array year;
(6) Adjustment of costs and ceiling maximums by the increasein the National Nursing Home Price Index ("NNHPI") for the direct labor costcenter and the other operating cost center for year between array years; suchadjustments to be applied on October 1st of each year beginning October 1, 2003for the direct labor cost center and October 1, 2005 for the other operatingcost center, except for the fiscal year beginning July 1, 2006 for which theprice index shall be applied on February 1, 2007 and for the fiscal yearbeginning October 1, 2007 for which the adjustment of costs and ceilingmaximums shall be one and one-tenth percent (1.1%). For the fiscal yearbeginning July 1, 2008, the price index shall be applied on April 1, 2009.
(7) Application of a fair rental value system to be developedby the department for calculating allowable reimbursement for the property costcenter;
(8) Such quality of care and cost containment incentives asmay be established by departmental regulations.
(9) Notwithstanding the above provisions, for FY 2009 thedepartment is authorized to reduce the per diem room and board rate calculatedin accordance with the principles of reimbursement as described above, paid tothe nursing facilities certified to participate in the Title XIX Medicaidprogram for services rendered to Medicaid-eligible residents by five percent(5%). This reduction is deemed to be reasonable and adequate to meet the costswhich must be incurred by efficiently and economically operated facilities inaccordance with 42 U.S.C. § 1396a(a)(13).
(c) Phase I Implementation. The department shall filea state plan amendment with the U.S. Department of Health and Human Services onor before August 1, 2003 to modify the principles of reimbursement for nursingfacilities, to be effective on October 1, 2003, or as soon thereafter as isauthorized by an approved state plan amendment, to establish the direct laborcost center and the pass through items cost center utilizing calendar year 2002cost data, and to apply the ceiling maximums in subsections (b)(4) and (b)(5).Nursing facilities whose allowable 2002 direct labor costs are below the medianin the direct labor cost center may make application to the department for adirect labor cost interim payment adjustment equal to twenty-five percent (25%)of the amount such allowable 2002 direct labor costs are below the median inthe direct labor cost center, provided that the interim payment adjustmentgranted by the department on or after October 1, 2003 must be expended by thefacility on expenses allowable within the direct labor cost center, and anyportion of the interim payment not expended on allowable direct labor costcenter expenses shall be subject to retroactive adjustment and recoupment bythe department upon the department's determination of a final direct laborpayment adjustment after review of the facility's actual direct laborexpenditures. The final direct labor payment adjustment will be included in thefacility's October 1, 2004 rate until the facility's next base year.
(d) Phase II Implementation. The department shall filea state plan amendment with the U.S. Department of Health and Human Services tomodify the principles of reimbursement for nursing facilities, to be effectiveon September 1, 2004, or as soon thereafter as is authorized by an approvedstate plan amendment, to establish a fair rental value system for calculatingallowable reimbursement for the property cost center in accordance withsubsection (b)(7); provided, however, that no facility shall receive a paymentas of September 1, 2004 for property-related expenses pursuant to the fairrental value system that is less than the property-related payment they wouldhave received for the other property-related ("OPR") cost center system ineffect as of June 30, 2004.
§ 40-8-19 Rates of payment to nursingfacilities. – (1) The rates to be paid by the state to nursing facilities licensed pursuantto chapter 17 of title 23, and certified to participate in the Title XIXMedicaid program for services rendered to Medicaid-eligible residents, shall bereasonable and adequate to meet the costs which must be incurred by efficientlyand economically operated facilities in accordance with 42 U.S.C. §1396a(a)(13). The department of human services shall promulgate or modify theprinciples of reimbursement for nursing facilities currently in effect on July1, 2003 to be consistent with the provisions of this section and Title XIX, 42U.S.C. § 1396 et seq., of the Social Security Act.
(2) The department of human services shall review the currentmethodology for providing Medicaid payments to nursing facilities, includingother long-term care services providers, and is authorized to modify theprinciples of reimbursement to provide for an acuity based rate adjustment tonursing facilities. The department of human services is authorized to implementchanges to the payment structure for the purpose of basing compensation forMedicaid services to nursing facilities and long term care service providersfor services which shall be based upon performance, quality, and the scope andthe intensity of the services required by the provider to meet the Medicaidrecipient's level of care needs. The acuity based rate adjustment shall takeeffect on January 15, 2010, provided the Department of Human Services has heldpublic hearings and submitted the final implementation plan to the Chairpersonsof the House and Senate Finance Committees no later than December 1, 2009.
(b) Rate reform. Subject to the phase-in provisions insubsections (c) and (d), the department shall, on or before October 1, 2005,modify the principles of reimbursement for nursing facilities to include thefollowing elements:
(1) Annual base years;
(2) Four (4) cost centers: direct labor, property, otheroperating, and pass through items;
(3) Re-array of costs of all facilities in the labor andother operating cost centers every three (3) years beginning with calendar year2002;
(4) A ceiling maximum for allowable costs in the direct laborcost center to be established by the department between one hundred ten percent(110%) and one hundred twenty-five percent (125%) of the median for allfacilities for the most recent array year.
(5) A ceiling maximum for allowable costs in the otheroperating cost center to be established by the department between ninetypercent (90%) and one hundred fifteen percent (115%) of the median for allfacilities for the most recent array year;
(6) Adjustment of costs and ceiling maximums by the increasein the National Nursing Home Price Index ("NNHPI") for the direct labor costcenter and the other operating cost center for year between array years; suchadjustments to be applied on October 1st of each year beginning October 1, 2003for the direct labor cost center and October 1, 2005 for the other operatingcost center, except for the fiscal year beginning July 1, 2006 for which theprice index shall be applied on February 1, 2007 and for the fiscal yearbeginning October 1, 2007 for which the adjustment of costs and ceilingmaximums shall be one and one-tenth percent (1.1%). For the fiscal yearbeginning July 1, 2008, the price index shall be applied on April 1, 2009.
(7) Application of a fair rental value system to be developedby the department for calculating allowable reimbursement for the property costcenter;
(8) Such quality of care and cost containment incentives asmay be established by departmental regulations.
(9) Notwithstanding the above provisions, for FY 2009 thedepartment is authorized to reduce the per diem room and board rate calculatedin accordance with the principles of reimbursement as described above, paid tothe nursing facilities certified to participate in the Title XIX Medicaidprogram for services rendered to Medicaid-eligible residents by five percent(5%). This reduction is deemed to be reasonable and adequate to meet the costswhich must be incurred by efficiently and economically operated facilities inaccordance with 42 U.S.C. § 1396a(a)(13).
(c) Phase I Implementation. The department shall filea state plan amendment with the U.S. Department of Health and Human Services onor before August 1, 2003 to modify the principles of reimbursement for nursingfacilities, to be effective on October 1, 2003, or as soon thereafter as isauthorized by an approved state plan amendment, to establish the direct laborcost center and the pass through items cost center utilizing calendar year 2002cost data, and to apply the ceiling maximums in subsections (b)(4) and (b)(5).Nursing facilities whose allowable 2002 direct labor costs are below the medianin the direct labor cost center may make application to the department for adirect labor cost interim payment adjustment equal to twenty-five percent (25%)of the amount such allowable 2002 direct labor costs are below the median inthe direct labor cost center, provided that the interim payment adjustmentgranted by the department on or after October 1, 2003 must be expended by thefacility on expenses allowable within the direct labor cost center, and anyportion of the interim payment not expended on allowable direct labor costcenter expenses shall be subject to retroactive adjustment and recoupment bythe department upon the department's determination of a final direct laborpayment adjustment after review of the facility's actual direct laborexpenditures. The final direct labor payment adjustment will be included in thefacility's October 1, 2004 rate until the facility's next base year.
(d) Phase II Implementation. The department shall filea state plan amendment with the U.S. Department of Health and Human Services tomodify the principles of reimbursement for nursing facilities, to be effectiveon September 1, 2004, or as soon thereafter as is authorized by an approvedstate plan amendment, to establish a fair rental value system for calculatingallowable reimbursement for the property cost center in accordance withsubsection (b)(7); provided, however, that no facility shall receive a paymentas of September 1, 2004 for property-related expenses pursuant to the fairrental value system that is less than the property-related payment they wouldhave received for the other property-related ("OPR") cost center system ineffect as of June 30, 2004.
§ 40-8-19 Rates of payment to nursingfacilities. – (1) The rates to be paid by the state to nursing facilities licensed pursuantto chapter 17 of title 23, and certified to participate in the Title XIXMedicaid program for services rendered to Medicaid-eligible residents, shall bereasonable and adequate to meet the costs which must be incurred by efficientlyand economically operated facilities in accordance with 42 U.S.C. §1396a(a)(13). The department of human services shall promulgate or modify theprinciples of reimbursement for nursing facilities currently in effect on July1, 2003 to be consistent with the provisions of this section and Title XIX, 42U.S.C. § 1396 et seq., of the Social Security Act.
(2) The department of human services shall review the currentmethodology for providing Medicaid payments to nursing facilities, includingother long-term care services providers, and is authorized to modify theprinciples of reimbursement to provide for an acuity based rate adjustment tonursing facilities. The department of human services is authorized to implementchanges to the payment structure for the purpose of basing compensation forMedicaid services to nursing facilities and long term care service providersfor services which shall be based upon performance, quality, and the scope andthe intensity of the services required by the provider to meet the Medicaidrecipient's level of care needs. The acuity based rate adjustment shall takeeffect on January 15, 2010, provided the Department of Human Services has heldpublic hearings and submitted the final implementation plan to the Chairpersonsof the House and Senate Finance Committees no later than December 1, 2009.
(b) Rate reform. Subject to the phase-in provisions insubsections (c) and (d), the department shall, on or before October 1, 2005,modify the principles of reimbursement for nursing facilities to include thefollowing elements:
(1) Annual base years;
(2) Four (4) cost centers: direct labor, property, otheroperating, and pass through items;
(3) Re-array of costs of all facilities in the labor andother operating cost centers every three (3) years beginning with calendar year2002;
(4) A ceiling maximum for allowable costs in the direct laborcost center to be established by the department between one hundred ten percent(110%) and one hundred twenty-five percent (125%) of the median for allfacilities for the most recent array year.
(5) A ceiling maximum for allowable costs in the otheroperating cost center to be established by the department between ninetypercent (90%) and one hundred fifteen percent (115%) of the median for allfacilities for the most recent array year;
(6) Adjustment of costs and ceiling maximums by the increasein the National Nursing Home Price Index ("NNHPI") for the direct labor costcenter and the other operating cost center for year between array years; suchadjustments to be applied on October 1st of each year beginning October 1, 2003for the direct labor cost center and October 1, 2005 for the other operatingcost center, except for the fiscal year beginning July 1, 2006 for which theprice index shall be applied on February 1, 2007 and for the fiscal yearbeginning October 1, 2007 for which the adjustment of costs and ceilingmaximums shall be one and one-tenth percent (1.1%). For the fiscal yearbeginning July 1, 2008, the price index shall be applied on April 1, 2009.
(7) Application of a fair rental value system to be developedby the department for calculating allowable reimbursement for the property costcenter;
(8) Such quality of care and cost containment incentives asmay be established by departmental regulations.
(9) Notwithstanding the above provisions, for FY 2009 thedepartment is authorized to reduce the per diem room and board rate calculatedin accordance with the principles of reimbursement as described above, paid tothe nursing facilities certified to participate in the Title XIX Medicaidprogram for services rendered to Medicaid-eligible residents by five percent(5%). This reduction is deemed to be reasonable and adequate to meet the costswhich must be incurred by efficiently and economically operated facilities inaccordance with 42 U.S.C. § 1396a(a)(13).
(c) Phase I Implementation. The department shall filea state plan amendment with the U.S. Department of Health and Human Services onor before August 1, 2003 to modify the principles of reimbursement for nursingfacilities, to be effective on October 1, 2003, or as soon thereafter as isauthorized by an approved state plan amendment, to establish the direct laborcost center and the pass through items cost center utilizing calendar year 2002cost data, and to apply the ceiling maximums in subsections (b)(4) and (b)(5).Nursing facilities whose allowable 2002 direct labor costs are below the medianin the direct labor cost center may make application to the department for adirect labor cost interim payment adjustment equal to twenty-five percent (25%)of the amount such allowable 2002 direct labor costs are below the median inthe direct labor cost center, provided that the interim payment adjustmentgranted by the department on or after October 1, 2003 must be expended by thefacility on expenses allowable within the direct labor cost center, and anyportion of the interim payment not expended on allowable direct labor costcenter expenses shall be subject to retroactive adjustment and recoupment bythe department upon the department's determination of a final direct laborpayment adjustment after review of the facility's actual direct laborexpenditures. The final direct labor payment adjustment will be included in thefacility's October 1, 2004 rate until the facility's next base year.
(d) Phase II Implementation. The department shall filea state plan amendment with the U.S. Department of Health and Human Services tomodify the principles of reimbursement for nursing facilities, to be effectiveon September 1, 2004, or as soon thereafter as is authorized by an approvedstate plan amendment, to establish a fair rental value system for calculatingallowable reimbursement for the property cost center in accordance withsubsection (b)(7); provided, however, that no facility shall receive a paymentas of September 1, 2004 for property-related expenses pursuant to the fairrental value system that is less than the property-related payment they wouldhave received for the other property-related ("OPR") cost center system ineffect as of June 30, 2004.
