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PA Bulletin, Doc. No. 99-558

NOTICES

Payments to Nursing Facilities; Revised July 1, and October 1, 1998 Payment Rates; Revised MDS 2.0 Transition Payments

[29 Pa.B. 1790]

   By notices dated June 27, 1998, October 31, 1998 and November 14, 1998, the Department of Public Welfare (Department) announced and made available to the public its proposed and final payment rates for Medical Assistance (MA) nursing facility services for the fiscal quarter beginning July 1, 1998, and its proposed payment rates for MA nursing facility services for the fiscal quarter beginning October 1, 1998. (28 Pa.B. 2977, 5532 and 5723) By separate notice dated October 31, 1998, the Department also announced its intent to amend its payment methods and standards for MA nursing facility services to provide MDS 2.0 Transition Payments during a 3-year transition period, and made available to the public its proposed MDS 2.0 base rates and per diem add-ons for the fiscal quarters beginning July 1 and October 1, 1998. (28 Pa.B. 5533) The Department invited interested parties to submit written comments regarding the proposed and final payment rates and MDS 2.0 Transition Payments.

   In light of its review and evaluation of comments received concerning the final July 1, 1998 and proposed October 1, 1998 rates, its ongoing discussions with the nursing facility trade associations and its further analysis of overall rate setting issues, the Department hereby:

   *  Rescinds its final rates for the fiscal quarter beginning July 1, 1998 which were announced and made available to the public by the notice dated October 31, 1998;

   *  Announces its decision to recalculate nursing facility case mix indices (CMIs) commencing with the February 1998 picture date and to issue final payment rates for the fiscal quarters beginning July 1, 1998 using the recalculated MA CMIs;

   *  Announces and makes available to the public revised proposed payment rates for MA nursing facilities for the fiscal quarters beginning July 1 and October 1, 1998;

   *  Announces revisions to the proposed changes in its payment methods and standards relating to MDS 2.0 Transition Payments described in the October 31, 1998 notice; and

   *  Announces and makes available to the public the interim rates by which it will pay for MA nursing facility services pending the issuance of final payment rates and MDS 2.0 Transition Payments for FY 1998-99.

   The Department is publishing this notice in accordance with 42 U.S.C.A. § 1902(a)(13)(A), as amended by section 4711 of the Balanced Budget Act of 1997, (P. L. 105-33), § 4711 and 42 CFR 447.205.

MA Nursing Facility Payment Rates

   As indicated in the notices referenced previously, the Department followed the methodology set forth in 55 Pa. Code Chapter 1187 to set the proposed and final payment rates previously announced and made available for the fiscal quarters beginning July 1 and October 1, 1998. In accordance with that methodology, the Department adjusted each nursing facility's limited resident care costs by its MA CMIs for the February 1998 and May 1998 picture dates to establish the facility's quarterly per diem rates. The Department used resident assessment data reported by the facility on the Federal Minimum Data Set (MDS) 2.0 instrument, including data reported for quarterly assessments, to calculate the facility's February 1998 and May 1998 MA CMIs.

   In commenting on the announced July and October payment rates, interested parties including the nursing facility trade associations objected to, among other things, the Department's use of quarterly assessment data to calculate nursing facility CMIs for price and rate-setting purposes. Upon consideration of these comments and its further discussions with representatives of the trade associations, the Department has decided to calculate facility CMIs for picture dates commencing February 1998 using only resident data reported for admission, annual and significant change assessments. The Department will use these CMIs in the price and rate setting process for fiscal quarters beginning July 1, 1998.

   To determine the effect of this decision on nursing facility payment rates, the Department calculated estimated February 1998 and May 1998 MA CMIs using the most recent admissions, annual and significant change assessment data currently available to the Department for MA residents. If the Department did not have the assessment data available for an MA resident, the Department substituted the facility's November 1997 MA CMI for that resident. The Department then revised each facility's quarterly per diem rates using these estimated MA CMIs. The Department is making these revised proposed rates available to the public as set forth as follows. While the Department calculated these proposed rates using the best available information, nursing facilities are cautioned that these rates are estimates only and may change once actual CMIs are determined and final rates are calculated.

   To calculate actual CMIs for picture dates commencing February 1998, the Department must ensure that the appropriate admission, annual or significant change assessment data for each resident has been properly submitted and is available to the Department for each applicable rate setting period. (See 55 Pa. Code §§ 1187.33 and 1187.91) The Department recently notified nursing facility providers that it will forward a list of residents from the Department's database that do not have an admission, annual, or significant change assessment on file for the applicable time period. Facilities will be given the opportunity to submit the admission, annual or significant change assessment that is applicable to that picture date for each identified resident. If a facility fails to submit an applicable assessment for an identifiedresident, the Department will assign a default CMI to that resident in accordance with 55 Pa. Code § 1187.33(b)(1). Facilities that are assigned a default CMI because they fail to submit assessment data for any identified resident will not qualify for MDS 2.0 Transition Payments (as described as follows) for FY 1998-99.

   Once the data submission is completed, the Department will recalculate actual MA CMIs for the February 1998 and May 1998 picture dates and announce final payment rates for the July and October 1998 fiscal quarters. Since it is recalculating July 1998 final rates, the Department rescinds the final rates for the fiscal quarter beginning July 1, 1998 previously announced and made available to the public by the notice dated October 31, 1998. The Department expects to announce the recalculated July 1998 final rates in June 1999 and the final October 1998 rates in October 1999. The Department will announce and make available payment rates for fiscal quarters beginning January 1, 1999 by separate notice.

   Nursing facilities are reminded that the Department's decision to use only admission, annual and significant change assessment data for MA price and rate setting does not alter Federal requirements relating to the collection and transmission of MDS 2.0 resident assessment data. Nursing facilities must continue to collect and transmit all assessments necessary to comply with Federal Medicare and Medicaid certification requirements.

MDS 2.0 Transition Payments

   The Department previously announced its intention to submit a State Plan Amendment (SPA) and to change its payment methods and standards to provide MDS 2.0 transition payments over a 3-year fiscal period beginning July 1, 1998. (See 28 Pa.B. 5533 (October 31, 1998)) Since making this announcement, however, the Department, as noted above, has decided to use only admission, annual and significant change assessment data to compute CMIs for price and rate setting purposes. The Department anticipates that the increases in payment rates resulting from this decision will substantially eliminate the impact of the use of the MDS 2.0 assessment instrument on facility payment rates. Nevertheless, to further minimize whatever impact, if any remains, the Department intends to proceed with the necessary amendments to its payment methods and standards to authorize an MDS 2.0 transition payment for FY 1998-99.

   To qualify for an MDS 2.0 Transition Payment for FY 1998-99, a facility must meet both of the following conditions: First, the facility has a quarterly base rate, as defined as follows, for one or more fiscal quarters of FY 1998-99 that is greater than its final case-mix quarterly per diem rate for the same quarter. Second, the facility submits appropriate assessment data for each resident identified by the Department in the assessment submission process described previously.

   To compute MDS 2.0 Transition Payments for FY 1998-99, the Department will make the following calculations for each nursing facility for each fiscal quarter in FY 1998-99. First, the Department will compute a quarterly base rate (QBR). The QBR will equal the facility's April 1998 rate inflated by the HCFA Nursing Home without Capital Market Basket Index, according to the number of quarters between April 1998 and the fiscal quarter. Second, the Department will compute a rate differential (RD). The RD will equal the difference be-tween the QBR and the facility's final case-mix per diem rate for the fiscal quarter. Third, the Department will compute a quarterly amount (QA). If the RD for the fiscal quarter is zero or a negative number, the QA for that quarter equals zero. If the RD for the fiscal quarter is a positive number, the QA for that quarter will equal the sum of the following amounts: (1) RD X the total number of MA days of care paid through the Medical Assistance Management Information System (MAMIS) for the fiscal quarter, and, (2) 1/3 RD X the total number of MA hospital days paid through MAMIS. Each facility's MDS 2.0 Transition Payment for FY 1998-99 will equal the sum of its four QAs.

   The Department has established facility QBRs and will make the QBRs available to the public. If the Health Care Financing Administration approves the SPA, the Department will calculate and make actual MDS 2.0 Transition Payments in lump sum once final case-mix rates for FY 1998-99 have been established. Payment for resident days and hospital days through MAMIS remains subject to applicable billing and payment requirements in regulations and the Nursing Facility Services Handbook.

Interim Rates

   Pending the submission of the resident assessments necessary to recalculate CMIs and final payment rates as described previously, the Department will make payments to facilities using revised interim rates. To establish interim rates for the quarter beginning January 1, 1999, the Department adjusted each facility's interim rate in effect from July 1, 1998 through December 31, 1998 by two quarters, using a 1.6% inflation factor. The Department notified each facility of its revised interim rates effective January 1, 1999 by letter sent during the last week of January 1999. To establish interim rates for the quarter beginning April 1, 1999, the Department adjusted the facility's January 1, 1999 interim using a 1.1% inflation factor. The Department used the HCFA Nursing Home without Capital Market Basket Index in making the inflation adjustments. The Department is making these revised interim rates available to the public as set forth as follows.

   Once final case-mix per diem rates are established and MDS 2.0 Transition Payments are authorized by an approved SPA and calculated, the Department will reconcile each facility's interim payments for FY 1998-99 based upon its final rates and any MDS 2.0 Transition Payment to which a facility may be entitled.

   The estimated increase in annual aggregate expenditures for Medical Assistance nursing facility services based on the MDS 2.0 Transition Payments for FY 1998-1999 is $93.281 million ($43.212 in State funds).

   A copy of this notice, the proposed payment rates for the July and October fiscal quarters, the QBRs and estimated MDS 2.0 Transition Payments, and revised interim rates for FY 1998-99 are available for review at the local County Assistance Offices throughout this Commonwealth. The rate information is available through the electronic Bulletin Board System (BBS) at (800) 833-5091 or by contacting Connie Pretz in the Policy Section of the Bureau of Long Term Care Programs at (717) 772-2570.

   Interested persons are invited to submit written comments to the Department within 30 days of publication of this notice in the Pennsylvania Bulletin. Comments should be addressed to: Department of Public Welfare, Office of Medical Assistance Programs, Attention: Suzanne Love, Room 227 Cherrywood Building, Harrisburg, PA 17105.

   Persons with a disability may use the AT&T Relay Services by calling (800) 654-5984 (TDD Users) or (800) 654-5988 (voice users). Persons who require another alternative should contact Thomas Vracarich in the Office of Legal Counsel at (717) 783-2209.

FEATHER O. HOUSTOUN,   
Secretary

   Fiscal Note: 14-NOT-197. (1)  General Fund; (2)  Implementing Year 1998-99 is $43.212 million; (3)  1st Succeeding Year 1999-00 is $43.615 million; 2nd Succeeding Year 2000-01 is $44.136 million; 3rd Succeeding Year 2001-02 is $44.676 million; 4th Succeeding Year 2002-03 is $45.222 million; 5th Succeeding Year 2003-04 is $45.774 million; (4)  1997-98 $617.252 million; 1996-97 $591.910 million; 1995-96 $648.549 million; (7)  Medical Assistance--Long Term Care; (8)  recommends adoption. Funds are included in the Department's budget to cover the transition payments.

[Pa.B. Doc. No. 99-558. Filed for public inspection April 2, 1999, 9:00 a.m.]



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