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PA Bulletin, Doc. No. 15-1077



Nursing Facility Assessment Program for Fiscal Year 2015-2016

[45 Pa.B. 2796]
[Saturday, June 6, 2015]

 This notice announces the proposed assessment amount, the proposed assessment methodology and the estimated aggregate impact on nursing facilities that will be subject to the assessment under the Nursing Facility Assessment Program beginning Fiscal Year (FY) 2015-2016.


 Article VIII-A of the Public Welfare Code (code) (62 P. S. §§ 801-A—815-A) authorizes the Department of Human Services (Department) to impose an annual monetary assessment on nonpublic and county nursing facilities in this Commonwealth each fiscal year. Under Article VIII-A of the code, the Department may impose the assessment only to the extent that the assessment revenues qualify as the State share of Medical Assistance (MA) Program expenditures eligible for Federal financial participation (FFP). See 62 P. S. § 803-A. To ensure receipt of FFP, Article VIII-A of the code requires the Department to seek a waiver from the Centers for Medicare and Medicaid Services (CMS) if necessary to implement the Assessment Program. See 62 P. S. § 812-A. For FY 2015-2016, the Department will submit a request to CMS for an amendment to the Assessment Program. The implementation of the changes to the Assessment Program is contingent on CMS's approval of the request.

 For each fiscal year that the Assessment Program is implemented, the code authorizes the Secretary of the Department (Secretary) to determine the aggregate amount of the assessment and the annual assessment rate in consultation with the Secretary of the Budget. See 62 P. S. § 804-A. The code specifies that annual assessment rates must be sufficient to generate at least $50 million in additional revenue, but not more than the maximum aggregate assessment amount that qualifies for FFP. See 62 P. S. § 804-A.

 The Secretary must publish a notice in the Pennsylvania Bulletin before imposing an annual assessment for a fiscal year. The notice must specify the amount of the assessment being proposed, explain the proposed assessment methodology, identify the estimated assessment amount and aggregate impact on nursing facilities subject to the assessment and provide interested persons a 30-day period to comment. See 62 P. S. § 805-A.

 This notice announces the assessment amounts, rates and methodology that the Department is proposing to implement in FY 2015-2016 and the estimated aggregate impact on nursing facilities that will be subject to the assessment in FY 2015-2016.

Proposed Assessment Methodology and Rates

 During FY 2015-2016, the Department is proposing to maintain the same assessment methodology that was used in FY 2014-2015, but for an adjustment to the qualifications for the assessment rates.

 The following nursing facilities will continue to be exempt from the Assessment Program in FY 2015-2016:

 (1) State-owned and operated nursing facilities.

 (2) Veteran's Administration nursing facilities.

 (3) Nursing facilities that have not been licensed and operated by the current or previous owner for the full calendar quarter prior to the calendar quarter in which an assessment is collected.

 (4) Nursing facilities that provide nursing facility services free of charge to all residents.

 Under the proposed rate structure, the Department will assess nonexempt nursing facilities at two rates. One rate will apply to four categories of nursing facilities: county nursing facilities; nursing facilities that have 44 or fewer licensed beds; certain Continuing Care Retirement Community (CCRC) nursing facilities (see 40 Pa.B. 7297 (December 18, 2010)); and nursing facilities with an MA occupancy rate of at least 94% based on the 4 most recently submitted assessment quarter reports for each nursing facility as of November 5, 2014. Previously, nursing facilities with an MA occupancy rate of at least 94% did not qualify for this rate unless they qualified under the existing three categories.

 Since the Nursing Facility Assessment Program began in 2003, the Department has requested and CMS has approved a waiver of the broad based and uniformity requirements under 42 CFR 433.68 (relating to permissible health care-related taxes) for each State fiscal year (SFY) thereby avoiding any reduction in FFP. When submitting the waiver request, the Department must demonstrate, among other things, that the assessment is generally redistributive using the statistical test described in 42 CFR 433.68(e)(2). Generally, to meet the test a certain proportion of high MA utilization facilities must be exempt or assessed at a lower rate. Due to the number of former county nursing facilities that are now assessed at a higher rate because of a change of ownership from county ownership to a nonpublic nursing facility provider, the Department is proposing that nursing facilities with an MA occupancy rate of at least 94% qualify for the lower assessment rate to ensure the value of the statistical test (B1/B2) previously referenced is at least 1 and thereby ensuring CMS's approval of the waiver request for SFY 2015-2016.

 A nursing facility's MA occupancy rate for the purpose of qualifying for the lower assessment rate will be calculated as follows: MA Occupancy Rate = Sum of Total Pennsylvania MA Days from each of the four quarters ÷ Sum of Total Resident Days from each of the four quarters, rounded to two decimals.

 The other rate will apply to all other nonexempt facilities, including nursing facilities that began participation in a CCRC on or after July 1, 2010. Using the applicable rate, the Department will calculate each nonexempt facility's quarterly assessment amount by multiplying its assessment rate by the facility's non-Medicare resident days during the calendar quarter that immediately proceeded the assessment quarter.

 The Department also proposes to increase the assessment rate for nonexempt nursing facilities in the higher rate tier from the rate in FY 2014-2015. The proposed assessment rates for FY 2015-2016 are as follows:

 (1) For county nursing facilities, for nursing facilities that have 44 or fewer licensed beds, for grandfathered CCRC nursing facilities and nursing facilities with an MA occupancy rate of at least 94% based on the latest 4 assessment quarters for each nursing facility as of November 5, 2014, the assessment rate will be $8.01 per non-Medicare resident day.

 (2) For all other nonexempt nursing facilities, the assessment rate will be $30.06 per non-Medicare resident day.

 Before proposing this change and determining the assessment rates to be applied in FY 2015-2016, the Department met with representatives of the nursing facility industry to discuss the need to modify the assessment to comply with Federal requirements and to obtain their input on various alternatives. The Department used this input in developing the proposed changes. These changes will ensure that the assessment program continues to achieve its intended purpose of generating revenue to support medical assistance payments to nursing facilities while minimizing any potential financial harm to nursing facilities.

Aggregate Assessment Amounts and Fiscal Impact

 The Department estimates that if the proposed assessment rates are implemented the annual aggregate assessment fees for nonexempt nursing facilities will total $485.035 million. The Department will use the State revenue derived from the assessment fees and any associated FFP to support payments to qualified MA nursing facility providers in accordance with applicable laws and regulations.

Public Comment

 Interested persons are invited to submit written comments regarding this notice to the Department of Human Services, Office of Long-Term Living, Bureau of Policy and Regulatory Management, Attention: Marilyn Yocum, P. O. Box 8025, Harrisburg, PA 17105-8025. Comments must be submitted within 30 days of publication of the notice. See 62 P. S. § 805-A. After considering the comments, the Secretary will publish a second notice announcing the final assessment rates for FY 2015-2016. The Department will not begin collecting assessment fees until after the publication of the final assessment rate notice.

 Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).


Fiscal Note: 14-NOT-951. (1) General Fund; (2) Implementing Year 2014-15 is $0; (3) 1st Succeeding Year 2015-16 is -$485,035,000; 2nd Succeeding Year 2016-17 through 5th Succeeding Year 2019-2020 are $0; (4) 2013-14 Program—$820,409,000; 2012-13 Program—$770,903,000; 2011-12 Program—$737,356,000; (7) MA—Long-Term Care; (8) recommends adoption. Funds have been included in the budget to cover this increase.

[Pa.B. Doc. No. 15-1077. Filed for public inspection June 5, 2015, 9:00 a.m.]

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