§ 1181.66. Setting ceilings on allowable net operating costs.
(a) The Department will establish maximum group per diem rate ceilings for allowable net operating costs for each level of care for general and county operated nursing facilities. Effective April 1, 1988, these ceilings will be based on 115% of the median of year-end reported costs excluding depreciation and interest. Facilities will not be reimbursed for net operating costs above the maximum group per diem rate ceilings. Costs which are not reimbursed within the established ceilings for a fiscal year may not be carried forward or backward to other fiscal years. The ceilings for general and county operated nursing facilities will be established as follows:
(1) The Department will use only year-end cost reports that cover a period of at least 180 days, are acceptable and received at least 90 days prior to the implementation date of the new ceilings. An acceptable cost report is one in which the following requirements are met:
(i) Applicable items are fully completed in accordance with the instructions incorporated in the Department’s cost report, including the necessary original signatures on the required number of copies.
(ii) Computations carried out on the form are accurate and consistent with other related computations.
(iii) The treatment of costs conforms to the applicable requirements of this subchapter and Subchapters B and C (relating to manual for allowable cost reimbursement for skilled nursing and intermediate care facilities; and Reserved).
(iv) Required documentation is included.
(2) In establishing net operating ceilings, the data from the provider’s latest acceptable cost report will be brought forward to a common date by using multipliers developed by the Department based on the most current revised urban wage earners and clerical workers consumer price index (CPI-W, 1967 = 100, all items, all cities, United States average). This factor will adjust for inflation for the period from the end-date of each cost report to the common date.
(3) To account for the period from the common date to the end date for which these ceilings will be in effect, the Department will again utilize a combination of inflation factors. If actual inflation factors are available, CPI-W will be utilized. If actual CPI-W is not available, the Department will take into account projected economic indicators, such as CPI-W. During Fiscal Years 1992-1993, 1993-1994 and 1994-1995, the Department will utilize CPI-W plus an amount equal to the difference between CPI-W and the DRI McGraw-Hill Health Care Costs-Nursing Home Market Basket applied to the full year ceiling setting period applicable to the last day of the second quarter of the calendar year, as the inflation factor under this paragraph. The Department will also increase the ceilings so calculated by an additional factor equal to 2.5%.
(4) The inflation factors used, the common date and the number of cost reports by facility year utilized will be published in the notice in the Pennsylvania Bulletin which establishes each new ceiling.
(5) Metropolitan Statistical Area (MSA) group ceilings for allowable net operating costs for county nursing facilities and general nursing facilities, excluding hospital-based and special rehabilitation facilities, will be established at least annually by the Department. Effective April 1, 1988, these ceilings will be based on 115% of the median of year-end reported costs excluding depreciation and interest. The groups used by the Department will be based on the classification levels announced by the Federal Office of Management and Budget no later than 90 days before the implementation date of the new ceilings. The Department will establish a separate ceiling for general nursing facilities, excluding hospital-based and special rehabilitation facilities, in counties which are located in Level A statistical areas, for those in Level B statistical areas, for those in Level C statistical areas and for those in nonstatistical areas under the Federal system. The Department will establish a separate ceiling for county nursing facilities in counties located in either Level A or Level B statistical areas and one for county nursing facilities in counties located in either Level C statistical areas or in nonstatistical areas under the Federal system.
(6) The Department will announce, by notice submitted for recommended publication in the Pennsylvania Bulletin and suggested codification in the Pennsylvania Code as an appendix to this section, the classification levels and the applicable per diem ceilings for the location of the facility, level of care, type of facility and date of service involved. A fiscal note, as required by section 612 of The Administrative Code of 1929 (71 P. S. § 232), will accompany the notice.
(b) Statewide ceilings for allowable net operating costs will be established at least annually by the Department under the method in subsection (a)(1)—(4) and (6) for hospital-based nursing facilities. Effective April 1, 1988, these ceilings will be based on 115% of the median of year-end reported costs excluding depreciation and interest.
(c) Statewide ceilings for allowable net operating costs will be established at least annually by the Department under the method in subsection (a)(1)—(4) and (6) for special rehabilitation facilities. Effective April 1, 1988, these ceilings will be based on 115% of the median of year-end reported costs excluding depreciation and interest.
(d) State-operated intermediate care facilities for the mentally retarded are reimbursed actual allowable costs under Medicare principles, subject to MA regulations. NonState-operated intermediate care facilities for the mentally retarded are reimbursed actual, allowable, reasonable costs under Subchapter C and other applicable MA Regulations.
(e) Psychiatric transitional facilities are reimbursed actual allowable costs under Medicare principles and within the limits of their budgets.
Authority The provisions of this § 1181.66 amended under sections 201, 403 and 443.1(2) and (3) of the Public Welfare Code (62 P. S. § § 201, 403 and 443.1 (2) and (3)).
Source The provisions of this § 1181.66 codified July 24, 1981, effective July 25, 1981, 11 Pa.B. 2610; amended July 2, 1982, effective July 1, 1982, 12 Pa.B. 2070; amended May 3, 1985, effective retroactively to July 1, 1984, 15 Pa.B. 1629; amended September 6, 1985, effective September 7, 1985, except that the groups and ceilings shall be effective and apply at audit to costs of services rendered from July 1, 1984 through December 31, 1985, 15 Pa.B. 3181; corrected January 24, 1986, effective September 7, 1985, 16 Pa.B. 249; amended September 5, 1986, effective July 1, 1985, 16 Pa.B. 3294; amended June 29, 1990, effective immediately and apply retroactively to April 1, 1988, 20 Pa.B. 3593; amended July 21, 1995, effective immediately and apply retroactively to July 1, 1992, and sunsetted on June 30, 1995, 25 Pa.B. 2893. Immediately preceding text appears at serial pages (196505) to (196507). (Editor’s Note: See 22 Pa.B. 3749 (July 18, 1992) for nursing home pooling provisions.)
Notes of Decisions The General Assembly lacked the authority to specify the starting date on which a raised ceiling for nursing home cost reimbursements would commence. Wesbury United Methodist Community v. Department of Public Welfare, 597 A.2d 271 (Pa. Cmwlth. 1991).
Cross References This section cited in 55 Pa. Code § 1181.45 (relating to ongoing responsibilities of providers); 55 Pa. Code § 1181.51 (relating to general payment policy); 55 Pa. Code § 1181.52 (relating to payment conditions); 55 Pa. Code § 1181.73 (relating to final reporting); 55 Pa. Code § 1181.74 (relating to auditing requirements related to cost reports); and 55 Pa. Code § 1181.217 (relating to establishing ceilings for allowable net operating costs).
APPENDIX A
CEILINGS ON NET OPERATING
COST REIMBURSEMENT FOR
GENERAL AND COUNTY NURSING
FACILITIES
Editor’s Note: The following document was published in the Pennsylvania Bulletin as a Notice and is codified under 1 Pa. Code § 3.1(9) (relating to contents of Code) as a document which the Legislative Reference Bureau finds to be general and permanent in nature.
Annex A
GENERAL NURSING FACILITIES
(Excluding Hospital-Based and Special Rehabilitation Facilities)
*Skilled Nursing Care
Net Operating
Ceilings Effective
July 1, 1995 thru
December 31, 1995*Intermediate
Care
Net Operating
Ceilings Effective
July 1, 1995 thru
December 31, 19951. LEVEL A Philadelphia Bucks $133.39 $110.54 Chester $133.39 $110.54 Delaware $133.39 $110.54 Montgomery $133.39 $110.54 Philadelphia $133.39 $110.54 Pittsburgh Allegheny $133.39 $110.54 Beaver $133.39 $110.54 Butler $133.39 $110.54 Fayette $133.39 $110.54 Washington $133.39 $110.54 Westmoreland $133.39 $110.54 2. LEVEL B Allentown—Bethlehem—Easton Carbon $117.20 $ 98.00 Lehigh $117.20 $ 98.00 Northampton $117.20 $ 98.00 Erie Erie $117.20 $ 98.00 Harrisburg—Lebanon—Carlisle Cumberland $117.20 $ 98.00 Dauphin $117.20 $ 98.00 Lebanon $117.20 $ 98.00 Perry $117.20 $ 98.00 Lancaster Lancaster $117.20 $ 98.00 Newburgh Pike $117.20 $ 98.00 Reading Berks $117.20 $ 98.00 Scranton—Wilkes-Barre—Hazleton Columbia $117.20 $ 98.00 Lackawanna $117.20 $ 98.00 Luzerne $117.20 $ 98.00 Wyoming $117.20 $ 98.00 York York $117.20 $ 98.00 3. LEVEL C Altoona Blair $115.67 $ 91.37 Johnstown Cambria $115.67 $ 91.37 Somerset $115.67 $ 91.37 Sharon Mercer $115.67 $ 91.37 State College Centre $115.67 $ 91.37 Williamsport Lycoming $115.67 $ 91.37 4. Non-MSA Adams $105.51 $ 86.15 Armstrong $105.51 $ 86.15 Bedford $105.51 $ 86.15 Bradford $105.51 $ 86.15 Cameron $105.51 $ 86.15 Clarion $105.51 $ 86.15 Clearfield $105.51 $ 86.15 Clinton $105.51 $ 86.15 Crawford $105.51 $ 86.15 Elk $105.51 $ 86.15 Forest $105.51 $ 86.15 Franklin $105.51 $ 86.15 Fulton $105.51 $ 86.15 Greene $105.51 $ 86.15 Huntingdon $105.51 $ 86.15 Indiana $105.51 $ 86.15 Jefferson $105.51 $ 86.15 Juniata $105.51 $ 86.15 Lawrence $105.51 $ 86.15 McKean $105.51 $ 86.15 Mifflin $105.51 $ 86.15 Monroe $105.51 $ 86.15 Montour $105.51 $ 86.15 Northumberland $105.51 $ 86.15 Potter $105.51 $ 86.15 Schuylkill $105.51 $ 86.15 Snyder $105.51 $ 86.15 Sullivan $105.51 $ 86.15 Susquehanna $105.51 $ 86.15 Tioga $105.51 $ 86.15 Union $105.51 $ 86.15 Venango $105.51 $ 86.15 Warren $105.51 $ 86.15 Wayne $105.51 $ 86.15 *Does not include depreciation and interest.
HOSPITAL-BASED NURSING FACILITIES *Skilled Nursing Care
Net Operating
Ceilings Effective
July 1, 1995 thru
December 31, 1995*Intermediate Care
Net Operating
Ceilings Effective
July 1, 1995 thru
December 31, 1995Statewide per diem ceilings $202.80 $135.08 *Does not include depreciation and interest.
SPECIAL REHABILITATION FACILITIES
*Skilled Nursing Care
Net Operating
Ceilings Effective
July 1, 1995 thru
December 31, 1995*Intermediate Care
Net Operating
Ceilings Effective
July 1, 1995 thru
December 31, 1995Statewide per diem ceilings $310.29 $231.97 *Does not include depreciation and interest. COUNTY NURSING FACILITIES *Skilled Nursing Care
Net Operating
Ceilings Effective
July 1, 1995 thru
December 31, 1995*Intermediate Care
Net Operating
Ceilings Effective
July 1, 1995 thru
December 31, 19951. LEVEL A and B Philadelphia Bucks $145.04 $125.96 Chester $145.04 $125.96 Delaware $145.04 $125.96 Montgomery $145.04 $125.96 Philadelphia $145.04 $125.96 Pittsburgh Allegheny $145.04 $125.96 Beaver $145.04 $125.96 Butler $145.04 $125.96 Fayette — — Washington $145.04 $125.96 Westmoreland $145.04 $125.96 Allentown—Bethlehem—Easton Carbon $145.04 $125.96 Lehigh $145.04 $125.96 Northampton $145.04 $125.96 Erie Erie $145.04 $125.96 Harrisburg—Lebanon—Carlisle Cumberland $145.04 $125.96 Dauphin $145.04 $125.96 Perry — — Lebanon $145.04 $125.96 Lancaster Lancaster $145.04 $125.96 Newburgh Pike — — Reading Berks $145.04 $125.96 Scranton—Wilkes-Barre—Hazleton Columbia — — Lackawanna $145.04 $125.96 Luzerne $145.04 $125.96 Wyoming — — York York $145.04 $125.96 2. LEVEL C and Non-MSA Altoona Blair $125.90 $103.12 Johnstown Cambria $125.90 $103.12 Somerset $125.90 $103.12 Sharon Mercer $125.90 $103.12 State College Centre $125.90 $103.12 Williamsport Lycoming — — All Non-MSA Adams $125.90 $103.12 Armstrong $125.90 $103.12 Bedford — — Bradford $125.90 $103.12 Cameron — — Clarion — — Clearfield — — Clinton $125.90 $103.12 Crawford $125.90 $103.12 Elk — — Forest — — Franklin $125.90 $103.12 Fulton — — Greene $125.90 $103.12 Huntingdon — — Indiana $125.90 $103.12 Jefferson — — Juniata — — Lawrence $125.90 $103.12 McKean $125.90 $103.12 Mifflin — — Monroe $125.90 $103.12 Montour — — Northumberland $125.90 $103.12 Potter — — Schuylkill $125.90 $103.12 Snyder — — Sullivan — — Susquehanna — — Tioga — — Union — — Venango $125.90 $103.12 Warren $125.90 $103.12 Wayne — — *Does not include depreciation and interest.
Source The provisions of these ceilings on net operating costs, amended September 5, 1986, effective July 1, 1985, 16 Pa.B. 3350; amended September 5, 1986, effective October 1, 1985, 16 Pa.B. 3354; amended October 17, 1986, effective July 1, 1986, 16 Pa.B. 3996; amended September 18, 1987, effective July 1, 1987, 17 Pa.B. 3784; amended October 14, 1988, effective July 1, 1988, 18 Pa.B. 4716; amended November 17, 1989, effective July 1, 1989, 19 Pa.B. 4974; amended September 21, 1990, effective July 1, 1990, 20 Pa.B. 4901; amended April 17, 1992, effective for services rendered from July 1, 1991 through June 30, 1992, 22 Pa.B. 1956; amended September 24, 1993, effective for services rendered from July 1, 1992 through June 30, 1993, 23 Pa.B. 4581; amended July 8, 1994, effective July 1, 1993, 24 Pa.B. 3406; amended April 7, 1995, effective for services rendered from July 1, 1994, through June 30, 1995, 25 Pa.B. 1348; amended January 19, 1996, effective for services rendered from July 1, 1995, through December 31, 1996, 26 Pa.B. 259. Immediately preceding text appears at serial pages (201404) to (201410).
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