[40 Pa.B. 6109]
[Saturday, October 23, 2010]
[Continued from previous Web Page]
PAYMENT FOR RTF SERVICES § 23.301. Allowable costs.
(a) Allowable costs.
(1) A facility's allowable costs incurred in providing services on the ISP are considered in the allocation of costs to the MA Program for its eligible recipients.
(2) Total allowable costs of an RTF shall be apportioned between third-party payors so that, within the limits of this subchapter, the share borne by the Department is based upon those actual services and costs related to children who are MA recipients.
(3) An RTF is responsible for the accounting of all costs and services. Miscellaneous costs shall be documented and justified to the Department.
(b) Determination of allowable costs. The Department will determine allowable costs in accordance with the following:
(1) The requirements of this subchapter.
(2) For items not specifically identified in this subchapter, the Medicare cost report requirements found in 42 CFR 413 (relating to principles of reasonable cost reimbursement; payment for end-stage renal disease services; optional prospectively determined payment rates for skilled nursing facilities) and the Medicare Provider Reimbursement Manual (HIM-15).
(3) For items not specifically identified in this subchapter, the Medicare cost report requirements found in 42 CFR 413 and the HIM-15, Generally Accepted Accounting Principles (GAAP).
(c) Administrative costs.
(1) Administrative costs include costs incurred for a common or joint purpose and are associated with supportive activities that are necessary to maintain the direct effort involved in providing services to children. These costs are not readily assignable to a specific cost center or program unit.
(2) Administrative costs shall be apportioned as general administration or allocated to other cost centers.
(3) General administrative costs are limited to 13% of the total MA eligible costs less general administrative costs and less depreciation and interest on capital indebtedness.
(4) Allowable administrative costs include the following:
(i) Compensation, fringe benefits and payroll taxes of the RTF's director, controller, purchasing agent, personnel director and other persons performing general supervision or management duties.
(ii) License fees, association dues, legal costs, including attorney's fees if the provider prevails; management fees and advertising.
(iii) Costs associated with the provision of supporting services such as bookkeeping, accounting, data processing and auditing.
(iv) Costs of space used for administrative purposes, including depreciation and interest or rental.
(v) Purchase of supplies and equipment used for administrative purposes.
(vi) Operating costs associated with administrative purposes, such as travel and communications.
(vii) Costs associated with the owners, officers or operators of the facility in accordance with the following:
(A) The salary or compensation cost of owners, officers, operators or persons other than RTF's staff only if their time and involvement is documented, and they are involved in the management of the RTF.
(B) The allowable cost for an owner, officer, operator or person other than RTF staff who are involved in the management of the RTF may not exceed the customary compensation and fringe benefits that a staff would receive if staff performed the work.
(viii) Other costs incurred for a common or joint purpose and are associated with supportive activities necessary to provide the services to children.
(d) Compensation and staffing costs.
(1) Compensation for direct care, administrative and support staff is allowable up to the combined prevailing Commonwealth salaries and benefits for functionally equivalent positions for staffing levels and positions specified in the current approved service description as described in § 23.221 (relating to description of services).
(2) Personnel costs for services that are not provided through salaried complement for the provision of necessary services for an MA recipient are allowable. Contracts that specify the nature of the service and define the unit and cost of the service shall be maintained by the facility, in addition to detailed documentation of services rendered.
(e) RTF maintenance expenses.
(1) Costs necessary for the establishment, operation and maintenance of the RTF certification and license are allowable to the extent that the maintenance costs do not duplicate costs of services performed by staff.
(2) Maintenance service contracts shall specify the nature and cost of the service in order to be allowable.
(3) Detailed documentation of maintenance service contracts shall be maintained by the RTF with all documentation of services rendered in order to be allowable.
(f) Unit-of-service contracts. Costs associated with unit-of-service contracts where a payment is made for each service unit rendered are allowable if the following conditions apply:
(1) Units-of-service for which costs are claimed have been delivered.
(2) The unit-of-service arrangement is more economical and efficient than other contractual relationships.
(3) Services do not duplicate those provided by staff.
(g) Cost of drug services.
(1) Drug services costs for medically necessary over-the-counter drugs are allowable.
(2) Detailed and itemized documentation of the claimed expense for drug services shall be maintained.
(3) Drug services costs are allowable for a nonprescription drug such as laxatives, aspirin and antacids if the drug is provided directly to an MA recipient from the RTF's own drug supply, the drug is prescribed by a physician's written order, and is medically necessary.
(4) Payment for prescription medication will be made to an enrolled pharmacy and costs related to prescription drugs that are noncompensable under the MA Program are not considered as allowable costs for an RTF.
(5) The RTF may not solicit or receive remuneration directly or indirectly in cash or in kind from a person in connection with the furnishing of drugs or in connection with referring a recipient to a person for the furnishing of drugs.
(h) Staff development and training costs. Costs associated with staff development and training costs are allowable if the training and development are associated with the requirements for each level of staff in the approved service description as described in § 23.221.
(i) Depreciation allowance.
(1) Depreciation on capital assets used to provide compensable services to children, including assets for normal, standby or emergency use, and specialized equipment such as wheelchairs, is allowable as specified in this subsection.
(2) An RTF will be reimbursed for allowable depreciation costs only if the RTF is the recorded holder of legal title of the capital asset or specialized equipment.
(3) An RTF shall use the straight-line method of depreciation. Other methods, such as the accelerated method of depreciation are not acceptable.
(4) The amount of annual depreciation shall be determined by first reducing the cost of the asset by any salvage value and then dividing by the number of years of useful life of the asset.
(i) The useful life may be shorter than the physical life depending upon the usefulness of the particular asset to the RTF.
(ii) A useful life may not be less than the relevant useful life published by the Internal Revenue Service or the Uniform Chart of Accounts and Definitions for Hospitals published by the American Hospital Association for the particular asset on which the depreciation is claimed.
(5) Depreciation expense for the year of acquisition and the year of disposal is computed by using either the half-year or actual time method of accounting. The number of months of depreciation expense may not exceed the number of months that the asset was in service. If the first year of operation is less than 12 months, depreciation is allowed only for the actual number of months in the first year of operation.
(6) The method and procedure, including the assigned useful lives, for computing depreciation shall be applied from year-to-year on a consistent basis and may not be changed, even if the facility is purchased as an ongoing operation.
(7) For depreciation to be allowed for an RTF that previously did not maintain fixed asset records as required in paragraph (13) and did not record depreciation in prior years, the RTF shall use the straight-line method of depreciation for the remaining useful life of the asset. The depreciation must be based on the cost of the asset at the time of original purchase or construction. Depreciation may not be taken on an asset that would have been fully depreciated if it had been properly recorded at the time of acquisition.
(8) Depreciation on an RTF that has no fixed asset records and is sold will be allowed to the extent to which the prior owner would have been allowed.
(9) Leasehold improvements shall be depreciated over the useful life of the asset.
(10) Gains on the sale of fixed and movable assets are considered to be equal to the salvage value which shall be established prior to the sale of the item. Gains on the sale of fixed and movable assets shall offset allowable costs for the period in which the gain was realized. Losses incurred on the sale or disposal of fixed or movable assets will not be reimbursed under the program.
(11) Allowable depreciation will be calculated using the cost basis of an asset, determined as follows:
(i) The cost basis of the depreciable assets of an RTF that are acquired as new shall be the purchase price of the asset.
(ii) The cost basis of the depreciable assets of an RTF that are acquired as used, shall be computed by the following method:
(A) The cost basis is the lower of the purchase price or the fair market value.
(B) Fair market value is the lowest of two or more bona fide appraisals at the time of sale.
(C) Depreciation that was taken or could have been taken by all prior owners shall be subtracted.
(D) Costs incurred during the construction of an asset, such as architectural, consulting, and legal fees, interest, and fund raising shall be capitalized as part of the cost of the asset.
(iii) If an asset is acquired by a trade-in, the cost of the new asset is the sum of the book value of the old asset and any cash or issuance of debt as consideration paid.
(iv) Donated assets shall be recorded at the current appraisal value or the lower of the following if available:
(A) The construction cost.
(B) The original purchase price.
(C) The donor's original purchase price.
(v) The cost basis for depreciable assets of an RTF transferred between related parties shall be the net book value of the seller at the date of the transfer in order for the related depreciation to be allowed.
(vi) The cost basis for depreciable assets of a facility acquired through stock purchase will remain unchanged from the cost basis of the previous owner in order for the related depreciation to be allowed.
(vii) The cost basis for depreciable assets of an RTF purchased in types of transactions other than those specified in subparagraphs (ii)—(iv) and (viii) may not exceed the seller's basis under this subchapter, less all depreciation that was taken or could have been taken by all prior owners.
(viii) The cost basis for depreciation on any asset the ownership of which changes shall be the lesser of the remaining allowable cost basis of the asset to the first owner of record or the allowable cost basis to the new owner; however, the cost basis must exclude costs, including legal fees, accounting and administrative costs, travel costs, or the cost of feasibility studies, attributable to the negotiation or settlement of the sale or purchase (by acquisition or merger) for which the MA Program previously made payment.
(12) Reasonable cost of depreciation will be allowed for the construction and renovation of buildings to meet applicable Federal, State or local laws and building codes.
(13) Allowable depreciation shall be documented in a fixed asset record that includes the following:
(i) Depreciation method used.
(ii) Description of the asset.
(iii) Date the asset was acquired.
(iv) Cost of the asset.
(v) Salvage value of the asset.
(vi) Depreciation cost.
(vii) Estimated useful life of the asset.
(viii) Depreciation for the year.
(ix) The accumulated depreciation.
(14) Depreciation cost is not allowable for assets expensed under another State or Federal payor.
(j) Interest.
(1) Necessary and proper interest on capital and current indebtedness is allowable.
(2) An RTF will be reimbursed for allowable interest on capital indebtedness with respect to an asset only if the facility is the recorded holder of legal title of the assets involved.
(3) Allowable interest on capital indebtedness shall not exceed the amount that a prudent borrower would pay. Interest on capital indebtedness will not be considered prudent if the provider cannot demonstrate that the rate does not exceed the rate available from lenders in this Commonwealth to similar borrowers on the date of the loan commitment.
(4) To be considered allowable, the interest expense shall be incurred and paid within 90 days of the close of the cost reporting period on a loan made to satisfy a financial need of an RTF and for a purpose reasonably related to providing services to children.
(5) Necessary interest on capital indebtedness applying to mortgages, bonds, notes, or other securities on the property and plant of the RTF will be allowed subject to the limitation of the amount recognized for depreciation purposes. The total value of mortgages, bonds, notes, or other securities on which interest on capital indebtedness is allowed may not exceed the depreciation basis of the assets.
(6) Investment income shall be used to reduce allowable interest expense on capital and current indebtedness unless the investment income is from one of the following:
(i) Gifts, donations and grants that are not restricted by the donor for payment of allowable costs.
(ii) Funded depreciation if the interest earned remains in the funds.
(iii) An RTF's qualified pension fund if the interest earned remains in the fund.
(iv) Interest income from gifts, if the funds on which the interest is derived are not commingled with funds that offset allowable costs.
(v) Fundraising efforts.
(7) Investment income that reduces allowable costs, including income on operating capital, shall be used to reduce interest expense on capital indebtedness first, and then used to reduce noncapital indebtedness.
(8) Interest expense shall be allowable if paid on loans from an RTF's donor-restricted funds, the funded depreciation account, or the RTF's qualified pension fund. The upper limit on allowable interest may not exceed the prime interest rate charged at the time funds are borrowed.
(9) Moneys borrowed for the purchase or redemption of capital stock will be considered as a loan for investment purposes, and the interest paid on those borrowed funds is not an allowable cost.
(10) Interest expense on funds borrowed for capital purchases are not allowable until all funds in the RTF's funded depreciation account are fully expended.
(k) Rental costs.
(1) Rental costs for space that is used by the RTF is allowable.
(2) Leasing or rental costs for buildings are allowable if parties are unrelated and the facility demonstrates that the rental or lease is an arm's length transaction and continues as such.
(3) Exceptions to paragraph (2) are allowed if the rental costs are based on a fair market rental appraisal as outlined in paragraph (5), or documented costs of ownership, except that return on equity is not permitted. Documented mortgage interest charges and depreciation are allowable costs.
(4) An RTF shall maintain adequate documentation to substantiate rental costs. Documentation must include copies of the Department's approval specified in paragraph (3), if applicable, the lease, and bills for taxes, insurance, and interest.
(5) An RTF shall maintain documentation of a fair market rental appraisal for all rental properties, from an individual who is a member of the Appraisal Institute, which includes the documented market value of three similar properties including land in the same geographic area.
(6) The maximum allowable annual rental shall be computed as follows:
(i) The property value is based upon the documented fair market value as determined in paragraph (5).
(ii) Net equity is obtained by reducing the property value by the estimated selling costs and any outstanding debt.
(iii) Net equity will be multiplied by the rate for return on equity capital as published by CMS in the ''Average Trust Fund Interest Rates,'' and announced in an annual bulletin published by the Department, for the beginning of the current fiscal year.
(iv) The actual cost of real estate taxes, insurance and interest on any debt, for the current fiscal year, are added to the amount in subparagraph (iii).
(v) The maximum annual rental may not exceed the sum of subparagraphs (iii) and (iv).
(7) An RTF shall maintain documentation of the calculation required in paragraph (6).
(8) Rent is allowable up to the maximum allowable annual rental value.
(9) If an RTF has a multiple-year lease, allowable rental costs are determined by new appraisals or by updating the existing appraisals using the interest rate as published by CMS in the ''Average Trust Fund Interest Rates,'' and announced in an annual bulletin published by the Department, and including current costs for taxes, insurance, and interest as specified in paragraph (6)(iv).
(10) A new appraisal shall be issued for every new lease or lease renewal in order to determine the allowable rental costs.
(l) Vehicle costs.
(1) Leasing or rental costs of automobiles are allowable if the RTF can demonstrate that the transaction is an arm's length transaction.
(2) Leasing or rental costs of automobiles are allowable if the automobile is leased or rented from a parent corporation if the RTF can demonstrate it is leasing or renting at less than or equal to the amount other vendors are charging for a similar automobile.
(3) An RTF shall use a competitive bidding process to purchase or lease vehicles.
(4) An RTF shall explore cost differentials between leasing and purchasing of vehicles and choose the least expensive alternative to be allowable.
(5) The expenses related to the personal use of RTF-owned or leased motor vehicles by staff, owners or officers are not allowable.
(6) Daily logs detailing use of vehicles as well as the maintenance activities and costs shall be maintained by the RTF.
(m) Purchases. Purchase of services, major renovations, capital equipment and supplies that exceed $5,000 annually are allowable if they are made through a competitive bidding process or a request for proposal process.
(1) Professional services including those of health care practitioners and attorneys are exempt from this requirement.
(2) A bid may be obtained for a maximum of 3 years.
(3) An RTF may not purchase in a piecemeal fashion to avoid the $5,000 limit.
(4) Purchases without bids shall be based upon sole source justification supported by documentation of the uniqueness or the limited availability of the service.
(n) Transportation.
(1) Transportation expenses are allowable for travel, lodging, subsistence and related items incurred by staff traveling on official business. Reimbursement for transportation expenses may not exceed that paid to employees of the Commonwealth.
(2) Costs incurred in transporting the parent and, when applicable, the guardian or custodian to a family therapy appointment at the facility where the child is present are allowable.
(o) Start-up costs.
(1) Start-up costs are costs that were incurred prior to the first day of officially operating as an RTF. Start-up costs are allowable and shall be capitalized as deferred charges and amortized over a minimum of 5 years.
(2) Start-up costs include the following:
(i) Administrative salaries.
(ii) Utility costs.
(iii) Taxes.
(iv) Insurance.
(v) Mortgage and other interest.
(vi) Staff training costs.
(vii) Repairs and maintenance.
(viii) Housekeeping.
(ix) Other allowable costs incurred prior to the first day of officially operating as an RTF.
(3) Costs that are properly identifiable as organization costs or capitalizable as construction costs shall be classified as such and excluded from start-up costs.
(4) Costs related to changes in ownership as defined in subsection (i)(11) are not allowable as start-up costs.
(5) Amortized start-up costs shall be reported in General Administration on the budgeted cost report or the cost report. The costs shall be documented on the budget narrative or the cost report. A 60-month amortization period is allowed for these costs.
§ 23.302. Income and offsets to allowable costs.
In the cost report, the RTF should report income from the following as sources to offset allowable costs in the determination of operating costs:
(1) Payment made by a child or assessed liability that is deducted from the amount billed for the child.
(2) Gifts, donations, endowments, bequests and contributions restricted by the donor for allowable costs.
(3) Refunds and cash discounts.
(4) Grants designated for allowable costs.
(5) Income from the National School Lunch Program.
(6) If a child is eligible to participate in the Supplemental Nutrition Program (SNAP), it is the RTF's responsibility to contact the local county assistance office and utilize food stamps accordingly.
(7) Income from space rental, vending machines and similar items.
(8) Fundraising efforts restricted for allowable costs
(9) Interest earned on items specified in paragraphs (1)—(8).
§ 23.303. Bed occupancy.
(a) In calculating an RTF's per diem rate, the Department will compute the number of RTF days of care used at 85% of available days of care if a provider reports an occupancy percentage of less than 85%.
(b) The average annual rate of occupancy is computed by dividing the total actual days of care provided by the total certified bed days available during the fiscal period. The total actual days of care provided include all days of service actually provided plus hospital reserve bed days in full up to the limits specified under § 23.307(b)(1) (relating to general payment policy). Reserved beds counted as actual days of service shall not be filled.
§ 23.304. Cost allocation.
(a) Cost allocation method.
(1) If a provider operates an RTF as well as other types of programs, the provider shall document at the time of the independent audit how various costs are allocated between the multiple programs, under § 23.301(c) (relating to allowable costs).
(2) The account of the cost allocation must include the following:
(i) Salary costs for individuals responsible for more than one program.
(ii) Staff fringe benefits for individuals responsible for more than one program.
(iii) Rental costs that apply to more than one program.
(iv) Motor vehicles that are used by more than one program.
(v) Other related expenses shared by more than one program.
(b) Disclosure.
(1) If costs have been allocated between programs and supporting services, disclosure shall be made in the independent audit and in accordance with generally accepted accounting principles in the independent audit.
(2) An RTF shall disclose in the independent audit the existence of any affiliate and its relationship to the established RTF, including the nature of any financial transaction between the affiliate and the RTF.
(c) Cost centers. An RTF that operates RTFs in different locations, but uses a consolidated financial report shall designate cost centers for each location in the independent audit. Information accompanying the independent audit must include the basis used to allocate income and expenses to each location.
§ 23.305. Related-party transactions.
(a) An RTF may include in its allowable costs, services and supplies furnished to the RTF by a related-party at an amount equal to the cost of the services and supplies to the related-party.
(b) The cost of services and supplies procured by the RTF through a related-party transaction may not exceed the cost of comparable services and supplies if purchased elsewhere.
(c) The related party's costs include reasonable costs incurred in the furnishing of services and supplies to the provider.
§ 23.306. Costs, limitations and services excluded from the RTF per diem rate.
(a) Excluded costs. The following costs are excluded from the operating costs as described in § 23.301(a) (relating to allowable costs) and not included in the RTF per diem rate:
(1) Costs for legal services relating to litigation against the Commonwealth, including administrative appeals, if the litigation is ultimately decided in favor of the Commonwealth.
(2) Administrative costs in excess of 13% of allowable medical assistance costs as specified in § 23.301(c).
(3) Costs for which Federal Financial Participation is precluded by statute including any services not on the ISP or services on the ISP not provided by and in the facility to residents of the RTF.
(4) Education costs associated with the child's Individual Educational Plan, Individual Family Service Plan and ISP which are to be paid for by the child's school district.
(5) Costs related to direct medical education, residency programs and education field placements, including staff costs.
(6) Costs for a service if payment is available from another public agency, insurance or health program, or any other source.
(7) Expenses not related to providing services to MA recipients.
(8) The Department will not contribute to a return on equity for proprietary programs.
(9) Costs associated with the following:
(i) Advertising (excluding employment opportunities).
(ii) Charitable contributions.
(iii) Staff recognition, such as gifts, awards and dinners.
(iv) Staff social functions, such as picnics and athletic teams.
(v) Nonstandard fringe benefits
(vi) Fundraising and marketing
(vii) Life insurance for officers and directors of the governing board, including life insurance premiums necessary to obtain mortgages and other loans.
(viii) Membership fees for social, fraternal and other organizations involved in activities unrelated to the program or an organization defined as a lobbying group under 65 Pa.C.S. Chapter 13A (relating to lobbying disclosure).
(ix) Meals for visitors.
(x) Political activities.
(xi) Related-party rental, leases or other payments in excess of the provision outlined in § 23.305 (relating to related-party transactions).
(xii) Reorganization costs.
(xiii) Federal, State or local income and excess profit taxes.
(xiv) Taxes from which exemptions are available to the provider.
(xv) Bad debts and contractual adjustments.
(xvi) Barber and beautician services.
(xvii) Client allowances.
(xviii) Clothing and shoes for children placed in the RTF.
(xix) Living expenses for live-in employees, including lodging, meals and personal laundry.
(xx) Meals for employees, except for employee meals provided as part of client training activities documented in the child's treatment plan.
(xxi) Penalties, fines or late charges assessed by any source, whether or not related to the RTF.
(xxii) Personal hygiene items for children placed in the RTF.
(xxiii) Personal travel for employees, including personal use of an RTF vehicle.
(xxiv) Transportation and living costs associated with onsite family visits.
(xxv) Nonworking officer salaries
(xxvi) Free care or discounted services.
(xvii) Personal telephone service.
(xviii) Personal radio and television service.
(xxix) Direct and indirect costs related to nonallowable cost centers as follows:
(A) Gift, flower and coffee shops.
(B) Homes for administrators or pastors.
(C) Convent areas.
(D) Nurses' quarters.
(xxx) Pennsylvania Capital Stock and Franchise Tax.
(xxxi) Collection expenses associated with bad debts.
(xxxii) Travel expenses for members of the governing body unrelated to the program.
(xxxiii) Vocational rehabilitation services.
(xxxiv) Parties and social activities not related to providing care to MA recipients.
(xxxv) Recreation costs not related to providing care to MA recipients.
(xxxvi) Charity, in-kind and courtesy allowances.
(xxxvii) Extraordinary costs related to, or precipitated by, bankruptcy.
(10) The following services are not included in the per diem and may not be included as a facility cost and will not be reimbursed by Medicaid for any residents of the RTF:
(i) Health care, which is not related to behavioral health.
(ii) Prescription drugs.
(iii) Ambulance services.
(iv) Methadone maintenance.
(v) Diagnostic procedures or laboratory tests.
(vi) Dental services.
(vii) Inpatient hospitalization.
(viii) Emergency room visits.
(ix) Diagnostic or therapeutic procedures for experimental, research or educational purposes.
(x) Experimental or investigation procedures or clinical trial research and services that are not in accordance with customary standards of medical practice or are not commonly used.
(b) Limitations on reimbursement.
(1) Costs that are not recognized as allowable costs in a fiscal year may not be carried forward or backward to other fiscal years for inclusion in allowable costs.
(2) Costs of services otherwise included in the ISP that are provided by and in the RTF may be billed by the RTF's subcontractors. However, if the service is not listed on the ISP or is not provided by and in the RTF, Medicaid reimbursement to a subcontractor of the RTF or independent provider is not permitted, including the following:
(i) Health care, which is not related to behavioral health.
(ii) Prescription drugs.
(iii) Methadone maintenance.
(iv) Diagnostic procedures or laboratory tests.
(v) Dental services.
§ 23.307. General payment policy.
(a) General payment policies. An admission to an RTF is subject to a retrospective review by the Department in addition to prior authorization review. If the medical record does not support the medical necessity of the admission or continued stay, or if care rendered is found to be inadequate, inappropriate, or harmful to a child, payment may be denied for all or part of the stay. Suspected cases of fraudulent practices by the RTF may be referred for further investigation to the Office of the Attorney General, Medicaid Fraud Control Unit or other agencies, as appropriate.
(b) Limitations on payment.
(1) Payment for hospital-reserved bed days:
(i) Payment to an RTF to reserve a bed when a child is hospitalized will only be made if the child is admitted to a licensed hospital or hospital unit accredited by the JCAHO as a hospital, the hospitalization occurs during an RTF stay, and the child is expected to return to the RTF.
(ii) Payment for hospital-reserved bed days is limited to 15 days per calendar year, per child, whether the child was in continuous or intermittent treatment at one or more RTFs during the calendar year. If a child does not return to the RTF, the child shall be deemed discharged on the date of admission to the hospital and hospital-reserved bed days will not be paid for.
(iii) Payment for hospital reserved bed days will begin on the date of the child's admission to the hospital and will be paid at the rate of one-third of the RTF's approved per diem payment rate.
(2) Payment for absence without authorization. The Department will make payment for up to 2 days of absence without authorization from an RTF when the conditions specified in § 23.282(c) (relating to policy) are met.
(c) Payment is not made to an RTF for:
(1) A day of care solely for the purpose of performing evaluations, diagnostic tests or tests not related to a diagnosis that requires behavioral health services in an RTF.
(2) A day of care during which the child was absent from the facility:
(i) Absence without authorization, unless the absence meets the criteria in subsection (b)(2).
(ii) Elopement.
(iii) Discharge against medical advice.
(iv) Hospitalization, unless the hospitalization meets the criteria in subsection (b)(1).
(v) Therapeutic leave.
(vi) Administrative leave of any kind.
(3) Custodial-care related or unrelated to court commitments. Payment for services provided to a child in an RTF under a court commitment will be made only if the RTF services are medically necessary and the child was not placed in the facility by the court system.
(4) Unnecessary admissions and days of care due to conditions which do not require services in an RTF.
(5) A day of care for a child who no longer requires services in an RTF.
(6) A day of care for a child who does not have a current DSM diagnosis including Axes I-V or ICD-9-CM diagnosis along with Axes III-V of the most current DSM supported by clinical documentation.
(7) A day of care not certified in accordance with the Department's admission and continued stay review process described in §§ 23.315 and 23.316 (relating to information required to request admission or continued stay; and admission authorization and continued stay authorization request).
(8) A day of care caused by a delay in requesting or performing necessary diagnostic studies or consultations.
(9) A day of care on or after the effective date of a court-commitment to another RTF.
(10) A day of care due to a delay in applying for a court-ordered commitment.
(11) A day of care provided to a child who is suitable for an alternate nonresidential treatment type or level of care, regardless of whether the child is under voluntary or involuntary commitment.
(12) The day of discharge or transfer to another facility.
(13) A day of care disallowed by the inspection of care requirements specified in § 23.331 (relating to inspection of care reviews: general).
(14) A day of care where the ISP was not in place under §§ 23.223 and 23.224 (relating to development of the ISP; and content of the ISP).
(d) If a determination is made, by an audit or other determination, that the RTF received excess funds in the form of an overpayment from the Department, the funds shall be returned to the Department within 6 months from the date the facility is notified.
§ 23.308. Third-party liability.
(a) RTFs shall utilize available third-party resources, including Medicare Part B for services a child receives while in the RTF.
(b) If expected payment by a third-party resource is not received, an RTF may bill the Department for days of care authorized by the Department and provided to the child.
(c) If an RTF receives reimbursement from a third-party subsequent to payment from the Department, the RTF shall repay the Department by submitting a replacement of prior claim, according to instructions in the Department's Provider Handbook and Billing Guide.
(d) If a child or the legal representative of a child requests a copy of the record of payment or amounts due, an RTF shall submit a copy of the invoice and the request to the Department's Office of Administration, at the address specified in the Department's Provider Handbook and Billing Guide.
(e) Except as specified in subsection (f), if a child has private insurance benefits, the Department will pay the lesser of the following:
(1) An RTF's per diem payment rate multiplied by the number of covered days, minus any third party resources available to the child for the care, including any Medicare Part B payment.
(2) The amount of the insurance plan's deductible and coinsurance minus any other third party resource available to the child for care, including any Medicare Part B payment.
(f) If the third party resources available to a child for care equal or exceed the RTF's per diem rate multiplied by the number of compensable days, the Department will not make payment.
§ 23.309. Payment for services in an out-of-State RTF.
(a) The Department will pay for services furnished by an out-of-State RTF enrolled to participate in the MA program only if the facility meets state requirements and one of the following applies:
(1) The RTF is in a state contiguous to this Commonwealth and located closer to the child's residence than an in-State RTF.
(2) The out-of-State RTF provides a specific program that is medically necessary for a child and is not available in this Commonwealth, as documented in the request for authorization.
(3) An RTF bed is not available in this Commonwealth after referrals to at least three in-State RTFs and all three were unable to accept the child.
(b) The per diem rate for services provided by an out-of-State RTF as established in § 23.312 (relating to general rate-setting policy) will not exceed the lesser of the following:
(1) An RTF's home-state Medicaid per diem payment rate for equivalent services.
(2) The average bed-weighted prospective per diem payment rate for RTFs located in this Commonwealth adjusted, if appropriate, for specialized care not available within this Commonwealth.
(c) The Department will pay the per diem rate established in accordance with this section minus any payments from the child, a legally responsible relative or a third-party resource.
§ 23.310. Billing requirements.
(a) An RTF shall submit invoices to the Department pursuant to the instructions in the Department's Provider Handbook and Billing Guide and subsequent instructions issued by the Department.
(b) Original and resubmitted claims, including replacement claims, must be received for final adjudication within 365 days following the last date of service on the invoice.
(c) If the service spans 2 fiscal years, a separate invoice must be prepared for each fiscal year.
(d) If the service spans 2 different per diem rates, a separate invoice must be prepared for each time period covered by the different rates.
(e) Except as specified in § 23.306 (relating to costs, limitations and services excluded from the RTF per diem rate), services and items provided to the child while in the facility are included in the per diem and shall be included in the RTF services bill and may not be invoiced separately.
§ 23.311. Annual cost reporting.
(a) Cost reporting.
(1) An RTF shall provide the Department with an annual cost report and an independent audit performed by an independent public accountant.
(i) The audit must include a schedule prescribed by the Department containing the financial activity of the RTFs.
(ii) The cost report shall be prepared on an accrual basis as required in this subchapter and clarified in the Department's cost report instructions.
(2) An RTF shall identify allowable services, administration, ancillary and related organization costs based on financial and statistical records maintained by the RTF. The cost information contained in the cost report must be current and accurate.
(3) The cost report must cover a fiscal period of 12 consecutive months, from July 1 to June 30, except as noted in paragraph (5).
(4) The cost report for the preceding fiscal year ending June 30 must be submitted to the Department by September 30 of that year.
(5) When an RTF begins operating after the start of the fiscal year, the cost report must cover the period from the date of approval for participation by the Department to June 30.
(6) If the cost report is not submitted by September 30, the Department will assess a daily penalty of $100.
(b) Review of a cost report.
(1) The Department will utilize the cost report and the annual independent audit to establish the per diem rate applicable to the next fiscal year.
(2) The Department may adjust costs reported in the cost report based upon the findings of current or closed audits, cost settlements, approved service description as defined in § 23.221 (relating to description of services), or as a result of other information the Department requests or is made aware of.
(3) The Department will inform the RTF in writing of adjustments to the cost report.
(4) If the Department does not inform the RTF in writing within 180 days of receiving the cost report of adjustments to the cost report, the cost report submitted by the RTF will be accepted by the Department as submitted.
(5) When an RTF files for protection under the bankruptcy laws, a cost report must be filed except where the debtor, RTF, rather than a trustee operates the RTF after the commencement of the bankruptcy. For example, the situation where the debtor, RTF, is the debtor in possession.
§ 23.312. General rate-setting policy.
Establishment of per diem rate.
(1) The cost report submitted by the provider, as adjusted by the Department, as specified in § 23.311(b) (relating to annual cost reporting), shall be used for the calculation of the per diem rate.
(2) The per diem rate for an RTF will be established by dividing the total projected operating costs by the number of days of care reported in the cost report subject to a minimum of 85% of the maximum number of days based on the number of beds specified on the RTF's Certificate of Compliance.
(3) The total projected operating cost is calculated as follows:
(i) For a new RTF, the total MA allowable costs from the budgeted cost report, including adjustments for income and nonallowable, limited and excluded costs, as determined by the Department.
(ii) For an existing RTF, the cost report filed September 30 as specified in § 23.311, including adjustments for income and nonallowable, limited and excluded costs, as determined by the Department.
(iii) An adjustment factor for each fiscal year, specified by the Department and announced in a bulletin published by the Department annually, is used to project the amount in subparagraph (i) or (ii) for each fiscal year through the end of the fiscal year in which the rate is to be effective. The adjustment factor is applied to the total operating costs on the cost report in subparagraph (i) or (ii), less depreciation on capital assets, limited to buildings and fixed equipment, and interest on capital indebtedness.
(iv) Add to the total operating cost depreciation on capital assets, limited to buildings and fixed equipment, and interest on capital indebtedness to obtain the total projected operating cost.
(v) Add an allowance for retained revenue using a percentage specified by the Department and outlined in a bulletin published by the Department annually.
(4) Once established, the per diem rate shall remain in place throughout the current fiscal year, unless the per diem rate is adjusted as a result of an audit or another determination.
(5) The costs incurred in providing all behavioral health treatment, including staff psychiatrist professional component of physician costs, and room and board are included in the per diem payment for RTF services and may not be billed separately or in addition to the per diem payment rate by the RTF or any other entity with which the RTF may have an agreement to provide such services.
(6) If there is more than one accounting method for handling a cost item, the method initially elected by the RTF shall be followed consistently in subsequent cost reports, unless the RTF submits prior written justification and receives approval from the Department for using a different method.
§ 23.313. Financial records.
(a) An RTF shall maintain adequate financial and statistical records for determination of costs payable under the MA Program for 5 years after the date of last payment.
(b) An RTF shall maintain the following records:
(1) General financial ledgers, journals and books.
(2) Original evidence of cost, such as purchase requisitions, purchase orders, vouchers, vendor invoices, requisitions for supplies, inventories, time cards, payrolls and bases for apportioning costs, that relate to the determination of reasonable costs and that are auditable.
(3) Records related to allocated administrative costs.
(4) Records relating to each cost report.
(5) Cash disbursement journals.
(6) Cash receipts journals.
(7) Payroll journals or computer printouts.
(8) Fixed asset ledgers or equivalent records.
(9) Inventory control records.
(10) Charts of accounts that parallels or cross-walks to the cost report format issued by the Department.
(11) Statement listing all sources of revenue to the RTF, including Federal, State, local and private sources.
(12) Accounting records.
(13) Documentation of staff compensation, by RTF positions and functionally equivalent Commonwealth positions.
§ 23.314. Evaluations and treatment plans.
(a) After admission, the team members specified in § 23.223(d), (e) and (f) (relating to development of the ISP) shall perform and prepare within the scope of their practice medical, psychiatric and psycho-social evaluations within the following time frames:
(1) Within a maximum of 30 days prior to the Department's receipt of an admission certification request or continued stay request; or
(2) Before authorization for payment, if the child becomes eligible for medical assistance after admission.
(b) Team members specified in § 23.223(d) and (e) shall, within their scope of practice, prepare the treatment plan. The plan must document the active treatment to be provided and be designed to achieve the child's discharge at the earliest possible time. RTF treatment plans must comply with the requirements in 42 CFR 441.155(b) and 456.180(b) (relating to individual plan of care; and individual written plan of care) based upon face-to-face contact.
(c) A written report of each evaluation, the treatment plan portion of the ISP and update must be entered in the child's record. RTF reports must be completed at the time of admission or if the individual is already in the facility, immediately upon completion of the evaluation or plan.
§ 23.315. Information required to request admission or continued stay.
(a) Certification of need for RTF services must be included in the documentation specified in subsection (e) and certified by:
(1) The interagency service planning team, prior to admission.
(2) The child's treatment team in concert with the interagency service planning team for continued stay.
(b) For an individual who is an MA recipient when admitted to a facility or program, the interagency service planning team must be independent of the RTF and:
(1) Include a physician.
(2) Have competence in diagnosis and treatment of mental illness, preferably in child psychiatry.
(3) Have knowledge of the individual's situation.
(c) For an individual who applies for Medicaid while in the RTF, such as delayed coverage, the certification must be:
(1) Made by the team responsible for the ISP as specified in § 23.223(d), (e) and (f) (relating to development of the ISP).
(2) Cover any period before application for which claims are made.
(d) The Interagency Service Planning team shall certify the following:
(1) Ambulatory care resources available in the community do not meet the treatment needs of the child.
(2) Proper treatment of the child's psychiatric condition requires services on an inpatient basis under the direction of a physician.
(3) The service can reasonably be expected to improve the child's condition or prevent further regression so that the services will no longer be needed.
(e) Documentation prepared by the ISPT specified in subsection (a) to request admission certification or by the RTF utilization review committee to request continued stay certification in accord with the Department's Utilization Review Manual must include the following:
(1) The Department-designated form signed by the prescribing physician or designee.
(2) The most recent psychiatric evaluation signed by the treating psychiatrist. The evaluation must be performed no more than 30 days before the planned admission date or the date the request was received by the Department. The child must have a face-to-face psychiatric evaluation that supports a DSM diagnosis, Axes I through V or an ICD-9-CM diagnosis along with Axes III through V of the most current DSM.
(3) The child's current or proposed treatment plan which meets the requirements under § 23.314 (relating to evaluations and treatment plans).
(4) The child's current or proposed plan of care summary.
(f) The completed Department form which describes services considered and tried prior to the recommendation for RTF services and indicates whether the County MH/MR Office recommends admission or continued stay in the facility.
§ 23.316. Admission authorization and continued stay authorization request.
(a) Admissions to and continued stays in an RTF must be prior authorized by the Department or its designee.
(b) A request for prior authorization must be made in accordance with the process specified in the Department Utilization Review Manual and contain the information required in § 23.315 (relating to information required to request admission or continued stay.)
(1) Except as specified in paragraph (2), an admission to an RTF must occur within 30 days of the date the Department approves the admission. If the admission does not occur, a new authorization request must be completed to update the status of the child and certify that RTF care is still medically necessary.
(2) The certification request for a child receiving service through the CCYA or under the jurisdiction of the juvenile court is the same as paragraph (1), unless the child needs immediate admission to an RTF for treatment of behavioral health needs and has associated child-safety or protection needs as determined by CCYA or the juvenile court. For immediate admissions, the following criteria shall be met:
(i) The child has a DSM-IV (or subsequent version) diagnosis, Axes I through V or ICD-9-CM (or subsequent version) diagnosis, along with Axes III through V, and is not in a mental health or substance abuse crisis.
(ii) The child requires admission because of child-safety or protection issues.
(iii) The interagency service planning team recommends RTF admission to meet the child's treatment needs.
(iv) If the child is admitted to an RTF in accordance with this paragraph, all information to support the admission required under § 23.316 (relating to admission authorization and continued stay authorization request) must be received by the Department within 14 days of the child's admission.
(v) If the Department denies the admission certification, the Department will not make payment for RTF services for the child.
(c) The following apply to recertification for continued stay:
(1) The request for continuation of stay must be made 30 days prior to the expiration of the certified length of stay.
(2) Either of the following conditions apply to request for delayed coverage:
(i) The request must be made within 30 days of the date the child was determined eligible for MA.
(ii) The request must be made within 30 days of the notification by a third-party resource, originally expected to cover the child's treatment, that the requested service is not covered or coverage is exhausted.
(d) This process does not apply to a period of service which was not covered by another payor because the service was not medically necessary using the other payor's criteria, or the other entity's payment policies were not followed and, therefore, resulted in a rejection.
§ 23.317. Authorization determination.
(a) The documentation and information submitted for the authorization request submitted to the Department must include accurate and detailed medical information to establish medical necessity for the admission or continued stay.
(b) The authorization request must include all information specified in § 23.314 (relating to evaluations and treatment plans). If the required information is not present, the request will be returned to the county case manager.
(c) The Department will determine whether the requested RTF services are medically necessary, and compensable so that the recipient receives written notice within 21 days of the date the Department received the request. The requested services will be deemed approved if a determination is not made within 21 days.
(d) Department approval is for medical necessity of care and does not assure the child is, will be, or will continue to be eligible for MA services on the date service is provided.
§ 23.318. Effective date of coverage.
(a) Admissions.
(1) Payment. Except as specified in paragraph (2):
(i) An RTF will receive payment beginning on the date of admission if the admission occurs within 30 days of the date the Department authorizes the admission.
(ii) An RTF shall inform the Department of the date the child was admitted to the RTF.
(2) Immediate child-safety or protection admission.
(i) If the child is admitted under § 23.316(b)(2) (relating to admission authorization and continued stay authorization request) and approvable information is submitted to the Department within 14 days of admission to the facility, the certified days are effective on the date of admission.
(ii) If the child was admitted under § 23.316(b)(2) but the documentation is not received by the Department within 14 days of admission to the facility, the effective date of the approval will be the date complete and approvable information is received by the Department.
(b) Continued stay.
(1) Recertification for a continued stay.
(i) If an approvable recertification request is received by the Department 30 days prior to the expiration of the certified length of stay, the effective date is the first day after the last day of previously certified stay.
(ii) If the recertification request is received by the Department less than 30 days prior to the expiration of the certified length of stay, and the stay is approved after the expiration of the previously approved stay, each day of delay in requesting an extension subsequent to the last previously certified stay shall result in the reduction of a corresponding number of days approved.
(2) Delayed coverage.
(i) If admission procedures were consistent with the requirements in § 23.316 and the child was not determined eligible for MA subsequent to admission, the effective date of the approval will be the date the continued stay certification was requested and approved if the request is made after eligibility was determined, or the date the child is determined eligible for medical assistance coverage if the request was initiated before eligibility was determined.
(ii) If other insurance was expected to pay in full for the service but failed to materialize, the effective date will be the later of the following:
(A) The admission date.
(B) The date the child became eligible for services after the admission.
(iii) If other insurance was expected to pay in full for the service but coverage was exhausted; the effective date will be the later of:
(A) The date coverage was exhausted.
(B) The date the request for certification was received by the Department.
(C) The date the child became eligible for services after the admission.
§ 23.319. Department delegation of responsibility to behavioral health managed care organizations.
Consistent with § 23.282(c) (relating to policy), the Department may delegate specific responsibilities to the behavioral health managed care organizations including, but not limited to, rate setting, medical necessity review, so long as the certifications in § 23.315(c) (relating to information required to request admission or continued stay) are performed by an independent team meeting the requirements, and the establishment of operational procedures.
UTILIZATION CONTROL § 23.321. Scope of claim review process.
RTF services provided to a child are subject to the utilization review procedures in this chapter and Chapter 1101 (relating to the general provisions).
§ 23.322. RTF utilization review.
(a) An RTF shall have an RTF utilization review plan.
(b) An RTF shall have a utilization review committee composed of two or more physicians, one of whom is knowledgeable in the diagnosis and treatment of mental diseases, and assisted by other professional personnel.
(c) An RTF utilization review committee may not include an individual who is directly responsible for the care of a child whose care is being reviewed or has a financial interest in the RTF.
(d) An RTF utilization review committee shall:
(1) Conduct reviews of a child's need for admission to an RTF and continued need for residential treatment services.
(2) Ensure that complete documentation is obtained.
(3) Ensure that reauthorization request for continued stay is submitted to the Department with the appropriate time frames specified in § 23.315 (relating to information required to request admission or continued stay).
(e) An RTF shall maintain the original signed copy and continued stay copies of the request documentation and the notification of the number of days certified with the child's medical records. Another copy of the notification of days certified shall be maintained with the RTF billing records.
(f) An RTF's utilization review committee representative shall notify the Department, according to the schedule established by the Department of the following:
(1) A child's admission to the RTF.
(2) A child's discharge from the RTF.
(3) Denial of admission or continued stay.
(g) An RTF shall maintain utilization review records for a minimum of 6 years from the date of submission of that year's end cost report or until any audit or litigation is completed, whichever is later.
(h) The RTF shall submit all clinical and fiscal records and other documents to the Department upon request within the time frame specified by the Department in the request.
§ 23.323. Adverse determinations.
When the RTF utilization review committee denies admission or continued stay, an adverse determination letter must be sent to the county MH/MR office, the Department, the behavioral health MCO, the CCYA with custody of the child, if applicable, and the JPO, if applicable.
INSPECTION OF CARE REVIEWS § 23.331. Inspection of care reviews: general.
(a) The Department will conduct an unannounced onsite visit as deemed appropriate by the Department to determine if the RTF continues to meet State and Federal regulations.
(b) An RTF shall provide the Department with a list of MA recipients in the RTF on the date of the visit.
(c) An RTF shall make the medical records of an MA recipient available to the Department representatives reviewing the RTF.
(d) An RTF shall ensure that MA recipients are available to meet in person with the Department representatives reviewing the RTF.
(e) The Department will determine through its review whether State and Federal regulations are met.
§ 23.332. Inspection of care reports.
(a) The Department or a designated agent will report the outcome of the inspection of care review to an RTF.
(b) If the individual or team reviewing the RTF recommends alternate care for a child:
(1) The Department or a designated agent will notify the child or the child's representative and the RTF director of the intended denial of payment authorization.
(2) The child or the child's representative has 30 days from the date the notice is mailed to grieve the decision or request a fair hearing. The RTF does not have the right to grieve or request a fair hearing unless it is acting as a child's representative.
(3) If the child or the child's representative requests a fair hearing within 10 days from the date the notice is mailed, payment for RTF care will continue pending the outcome of the hearing.
(4) If a fair hearing is requested more than 10 days from the date the notice is mailed, payment for RTF care is discontinued effective with the day the individual or team reviewing the RTF recommended alternative care.
(c) If the report from the individual or team reviewing the RTF cites deficiencies, the following apply:
(1) An RTF shall submit a written response to the identified Department office within 30 days of the control date shown on the summary report. The response must outline the RTF's planned course of action including the timeframes for correcting deficiencies.
(2) The individual or team reviewing the RTF will conduct follow-up visits to determine if the deficiencies have been corrected.
ADMINISTRATIVE SANCTIONS § 23.341. Provider abuse.
(a) If the Department determines that an RTF has billed for services inconsistent with this chapter, provided services outside the scope of customary standards of medical practice, or otherwise violated the standards set forth in the provider agreement, the RTF shall be subject to the sanctions in Chapter 1101 (relating to general provisions) up to and including termination from the MA program.
(b) If the Department determines that services or items provided by the RTF were not provided according to standards of practice for the particular discipline providing the service or were not medically necessary or were inappropriate, or otherwise noncompensable, the Department will deny payment for the services and items and related services and items and recover payment already made for the services and items and related services and items.
§ 23.342. Administrative sanctions.
If the RTF utilization review committee fails to conduct a continued stay review or fails to notify the Department within 30 days of the expiration of the previously assigned length of stay, the Department will not certify those days between the expiration of the previously assigned length of stay and the date the request for continued stay is received.
PROVIDER RIGHT OF APPEAL § 23.351. Provider right of appeal.
(a) An RTF may appeal adverse actions, including authorization, certification and payment, of the Department under Chapter 41 (related to Medical Assistance provider appeal procedures).
(b) RTF staff and subcontractors do not have the right to appeal under this chapter or Chapter 41.
(c) If an RTF appeals a decision by the Department to fully or partially deny payment for a child, the Department will withhold the denied payments pending a decision on the appeal. If a child is in an RTF and receiving services from an RTF, payment will continue.
(d) A child, parent and, when applicable, guardian or custodian, may appeal a denial of authorization, or the provider may appeal on behalf of the child as specified in Chapter 275 (relating to appeal and fair hearings and administrative disqualification hearings).
CHAPTER 3800. CHILD RESIDENTIAL AND DAY TREATMENT FACILITIES
GENERAL PROVISIONS § 3800.3. Exemptions.
This chapter does not apply to the following:
* * * * * (8) Community residences [for individuals with mental illness that provide care to both children and adults in the same facility or community residential host homes for individuals with mental illness that are] certified under Chapter 5310 (relating to community residential rehabilitation services for the mentally ill).
* * * * * (12) Residential treatment facilities licensed under Chapter 23 (relating to residential treatment facilities).
CHAPTER 5310. COMMUNITY RESIDENTIAL REHABILITATION SERVICES FOR THE MENTALLY ILL
Subchapter A. GENERAL PROVISIONS. § 5310.3. Applicability.
* * * * * (b) This chapter [does not apply] applies to child residential facilities which serve exclusively children [, which are governed by Chapter 3800 (relating to child residential and day treatment facilities)].
* * * * *
[Pa.B. Doc. No. 10-2002. Filed for public inspection October 22, 2010, 9:00 a.m.]
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