NOTICES
DEPARTMENT OF
PUBLIC WELFARE
Nursing Facility Assessment Program
[35 Pa.B. 3626] This notice announces the amount of the assessment that the Department of Public Welfare (Department) is proposing to implement for Fiscal Year (FY) 2005-2006, provides an explanation of the assessment methodology that the Department is proposing to use in FY 2005-2006 and identifies the estimated aggregate impact on nursing facilities which will be subject to the assessment.
Background
The act of September 30, 2003 (P. L. 169, No. 25) (Act 25)1 , known as the Nursing Facility Assessment Law, directs the Department to ''implement a monetary assessment'' on nonpublic licensed nursing facilities beginning July 1, 2003, and ending June 30, 2007, (Assessment Program). See sections 802-A and 815-A of Act 25 (62 P. S. §§ 802-A and 815-A). Act 25 further specifies that the Department may implement an Assessment Program ''only to the extent that the revenues generated therefrom will qualify as the State share of [MA] program expenditures eligible for Federal financial participation.'' See section 803-A of Act 25 (62 P. S. § 803-A). To guarantee that the assessment amounts qualify for matching Federal funds, Act 25 directs the Department to seek waivers from the Federal Centers for Medicare and Medicaid Services (CMS) as may be necessary to implement the Assessment Program in conformity with Federal law. See section 812-A of Act 25 (62 P. S. § 812-A).
For each fiscal year that the Assessment Program is implemented, the Secretary of the Department (Secretary), in consultation with the Secretary of the Budget, must determine the aggregate amount of the assessment and the annual assessment rate. See section 804-A of Act 25 (62 P. S. § 804-A). The aggregate amount and rate of assessment must be approved by the Governor's Office. The annual assessment rates must be sufficient to generate at least $50 million in additional revenue, subject to the maximum aggregate assessment amount that qualifies for Federal matching funds. See section 804-A of Act 25 (62 P. S. § 804-A).
Before implementing the Assessment Program in a fiscal year, the Secretary must publish a notice in the Pennsylvania Bulletin that specifies the amount of the assessment being proposed, provides an explanation of the assessment methodology and assessment amount and identifies the aggregate impact on nursing facilities subject to the assessment. See section 805-A of Act 25 (62 P. S. § 805-A). After consideration of any comments received during the 30-day comment period, the Secretary must publish a second notice announcing the rate of assessment for the fiscal year. Id.
The Secretary published a notice at 35 Pa.B. 1959 (March 26, 2005) announcing the final nursing facility assessment methodology and rates for FY 2003-2004 and FY 2004-2005. As specified in that notice, during the first 2 fiscal years of the Assessment Program, nursing facilities were exempt from payment of the assessment if they fell into any of the following three categories:
1. Government owned and operated nursing facilities.
2. Veterans 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 for which an assessment is collected.
All other licensed nursing facilities were assessed by the Department every calendar quarter. The assessment rate for a nonexempt nursing facility for each quarter was determined as follows:
1. If the nonexempt facility participates within a licensed Continuing Care Retirement Community (CCRC) or has 50 licensed beds or less, it was assessed at $1.50 per non-Medicare resident day in the calendar quarter preceding the assessment quarter.
2. All other nonexempt nursing facilities were assessed at $15.91 per non-Medicare resident day in the calendar quarter preceding the assessment quarter.
To assure that revenues generated from the Assessment Program qualified for Federal matching funds, the Department submitted a waiver request to CMS. CMS subsequently granted the waiver and approved implementation of the Assessment Program as described in the March 26, 2005, notice.
Proposed Assessment Methodology and Rates for FY 2005-2006
During FY 2005-2006, the Department intends to make several minor changes in the Assessment Program. More specifically, the Department is proposing to add a fourth category of exempt nursing facilities and implement a slight increase in the assessment rates for nonexempt facilities.
The following nursing facilities will be exempt from the Assessment Program in FY 2005-2006:
1. Government owned and operated nursing facilities.
2. Veterans 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 for which an assessment is collected.
4. Nursing facilities that provide nursing facility services free of charge to all residents.
As in the first 2 years of the Assessment Program, nonexempt nursing facilities will continue to be assessed on a quarterly basis during FY 2005-2006 based on the number of licensed beds in the facility, the nursing facility's CCRC status and the number of non-Medicare resident days during each calendar quarter immediately preceding the assessment quarter. During FY 2005-2006 the assessment rates for nonexempt facilities will be as follows:
1. The assessment rate for nonexempt nursing facilities that participate within a licensed CCRC or that have 50 licensed beds or less will be increased by $.04 to $1.54 per non-Medicare resident day.
2. The assessment rate for all other nonexempt nursing facilities will be increased by $.04 to $15.95 per non-Medicare resident day.
In its March 26, 2005, notice announcing the final assessment rates for FY 2003-2004 and FY 2004-2005, the Department described the guidelines that it intended to use in determining whether a nursing facility would qualify for the CCRC assessment rate in FY 2005-2006. See 35 Pa.B. 1959, 1961 (March 26, 2005). Upon further consideration of these guidelines, the Department has determined that additional clarification is necessary. For FY 2005-2006, the Department will consider a nursing facility to qualify for the CCRC assessment rate if the nursing facility satisfies the following criteria:
1. The nursing facility is owned or controlled by an entity that is certified as a CCRC by the Insurance Department (for purposes of this guideline, ''control'' means the power to direct or cause to direct the management and policies of the nursing facility, whether through equitable ownership of voting securities or otherwise).
2. The CCRC provides a continuum of care during the assessment period that includes residential living units that are either occupied or available for immediate occupancy.
3. The nursing facility is: (a) located on the same campus as the CCRC's residential living units; or (b) identified in the CCRC's Disclosure Statement and Resident Agreement under the Continuing-Care Provider Registration and Disclosure Act (40 P. S. §§ 3201--3225) and located no more than 30 miles from the campus on which the CCRC's residential living units are located.
Under these guidelines, a nursing facility that is owned or controlled by a CCRC which is planning to construct residential living units in the future, or is constructing residential units, but which has no residential units occupied or available for immediate occupancy, would not qualify for the CCRC assessment rate.
A nonexempt nursing facility that does not satisfy the criteria previously noted but believes that it otherwise qualifies for the CCRC rate may submit a written request to the Department that it be assessed at the CCRC rate. The written request should include any supporting documentation demonstrating that the nursing facility participates within a licensed CCRC and submitted to the Department of Public Welfare, Bureau of Long Term Care Programs, P. O. Box 2675, Harrisburg, PA 17105, Attn: NH Assessment Unit.
Aggregate Assessment Amount and Fiscal Impact
As a result of the implementation of the Assessment Program, the Department estimates that the annual aggregate assessment fees for nonexempt nursing facilities will total $279,552,809 for FY 2005-2006. All of the revenue derived from the assessment fees and associated Federal matching funds will be used to make payments to qualified MA nursing facility providers in accordance with applicable law and regulations.
Public Comment
Interested persons are invited to submit written comments regarding this notice to Gail Weidman, Chief, Program Analysis and Review Section, Department of Public Welfare, Division of Long Term Care Client Services, P. O. Box 2675, Harrisburg, PA 17105. Comments received within 30 days will be reviewed and considered for any subsequent revision of the notice.
Persons with a disability who require an auxiliary aid or service should submit comments using the AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).
ESTELLE B. RICHMAN,
SecretaryFiscal Note: 14-NOT-432. No fiscal impact; (8) recommends adoption. This assessment is expected to generate $249.553 million in additional revenue to supplement the Medical Assistance--Long-Term Care appropriation in Fiscal Year 2005-2006 as required by Article VIII-A of the Public Welfare Code.
[Pa.B. Doc. No. 05-1230. Filed for public inspection June 24, 2005, 9:00 a.m.] _______
1 Act 25 is codified in Article VIII-A of the Public Welfare Code (62 P. S. §§ 801-A-815-A).
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