NOTICES
Intermediate Care Facilities for the Mentally Retarded Assessment
[35 Pa.B. 1480] The purpose of this final notice is to announce the amount, methodology and aggregate impact of the assessment on Intermediate Care Facilities for the Mentally Retarded (ICFs/MR). This notice is published in compliance with section 805-C(a) of Act 69 of 2004 (62 P. S. § 805-C) and section 811-C of Act 154 of 2004 (62 P. S. § 811-C)
Article VIII-C of Act 69 of 2004 (62 P. S. §§ 801-C--811-C) authorizes the Department of Public Welfare (Department) to implement a monetary assessment on each ICF/MR within this Commonwealth. Act 69 of 2004 further requires that the Department provide initial and final public notices describing the assessment methodology and providing the level of assessment and the aggregate fiscal impact of the assessment. The initial public notice was published at 34 Pa.B. 6787 (December 25, 2004). Interested parties were given 30 days from the initial notice to submit comments to the Department. Act 154 of 2004 amends the act to allow the Department to impose the assessment effective July 1, 2003, for the Non-State ICFs/MR, including Intermediate Care Facilities for Persons with Other Related Conditions (ICFs/ORC) and allows the Department to impose the assessment effective July 1, 2004, for the Public ICF/MR programs (State Centers).
Public Comments Received
One written comment was received by the Department which indicated that the legislation did not authorize the assessment to be imposed retroactively for Non-State ICFs/MR. Specifically, the commentator stated that the legislation did not provide the Department with the legal authority to impose the assessment retroactively and is contrary to the express distinction in the managed care assessment legislation that does permit retroactive application. The Department disagrees with the commentator since Act 154 of 2004 which amended the act expressly provides that the assessment may be imposed for Non-State ICFs/MR on or after July 1, 2003. The Non-State ICF/MR provider community has been aware of the retroactive application since Act 69 of 2004 was passed and has had ongoing discussions with and written communications from the Department regarding the July 1, 2003, assessment application. No opposition has been expressed by any Non-State ICF/MR. Consequently, the Department does not intend to change the assessment application.
Assessment Methodology and Amount
As indicated in the initial public notice, the Department intends to impose an assessment on each licensed ICF/MR (which includes Non-State ICFs/MR, ICFs/ORC and State Centers) within this Commonwealth at a level of 6% of net operating revenue. The initial assessment will be made retroactively to July 1, 2003, as permitted under section 811-C of Act 69 of 2004 for Non-State ICF/MR and ICF/ORC programs and amended under section 811-C of Act 154 of 2004. The Department intends that the initial assessment for Fiscal Year (FY) 2003-04 will be imposed as a single annual amount and will be based on the revenue submitted by the providers on their most recently accepted annual cost reports for the Non-State ICF/MR and ICF/ORC programs. The Department has determined that the most recent available revenue amounts for the Non-State ICF/MR and ICF/ORC programs are from the FY 2002-03 cost reports. These revenue amounts will be trended forward by the budget inflators used by the Department for rate setting purposes. The budget inflator for FY 2003-04 was 1% for the Non-State ICF/MR program and 2% for the ICF/ORC program.
For FY 2004-05 the Department will calculate the annual assessment amount for each provider again using the revenue amounts from the providers' most recently accepted cost reports for the Non-State ICF/MR and ICF/ORC programs. These revenue amounts will be trended forward by the applicable budget inflators used by the Department for rate setting. For FY 2004-05 the most recent available revenue amounts for the Non-State ICF/MR and ICF/ORC programs are again from the providers' FY 2002-03 cost reports. The Department will use the adjusted net operating revenue amounts for the State Centers from the most recent available cost apportionment report. There are no inflationary increases applied to the State Center amounts.
The budget inflators are 1% for FY 2003-04 and 2% for FY 2004-05 for the Non-State ICF/MR program. The budget inflators are 2% for FY 2003-2004 and 2% for FY 2004-2005 for the ICF/ORC program. There is no inflationary increase applied to the State Centers for FY 2004-2005.
Once the annual assessment for FY 2004-2005 has been determined, the assessment will be collected on a quarterly basis from the State Centers. For the Non-State ICFs/MR and ICFs/ORC, the assessment will be collected on a quarterly basis for the first three quarters. For the fourth quarter, the assessment will be collected on a monthly basis.
For FY 2005-06 and thereafter, the Department intends to determine the assessment amounts using the same methodology as outlined previously for FY 2004-05. The Department intends to use the most recent available revenue data as submitted on the providers' most recently accepted annual cost reports as the basis for determining the 6% assessment amounts for the Non-State ICF/MR and the ICF/ORC programs and the most recently identified cost apportionment report for the State Centers.
For each year for which the assessment is in place, including the initial FY 2003-04 (for the Non-State ICF/MR and ICF/ORC programs only), the Department will provide each facility the specific amount of the assessment calculated for the facility
Fiscal Impact
The proposed FY 2003-04 assessment is expected to generate additional aggregate revenue of $14.645 million during FY 2004-05 and the FY 2004-05 assessment is expected to generate additional aggregate revenue of $31.237 million of which $29.968 million is expected to be received during FY 2004-05.
ESTELLE B. RICHMAN,
SecretaryFiscal Note: 14-NOT-412. No fiscal impact; (8) recommends adoption. This public notice announces the generation of an additional $14,645,000 in revenue in FY 2004-05 from 2003-04 assessments to ICFs/MR facilities including $14,510,000 in the Intermediate Care Facilities--MR appropriation and $135,000 in the Services to Persons with Disabilities appropriation. The FY 2004-05 assessments are estimated to generate an additional $29,968,000 in revenue during 2004-05 including $16,038,000 in the State Centers for the Mentally Retarded appropriation, $13,820,000 in the Intermediate Care Facilities--MR appropriation and $110,000 in the Services to Persons with Disabilities appropriation. Total additional aggregate revenue during Fiscal Year 2004-05 would be $44,613,000.
[Pa.B. Doc. No. 05-378. Filed for public inspection February 25, 2005, 9:00 a.m.]
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