RULES AND REGULATIONS
DEPARTMENT OF PUBLIC WELFARE
[ 55 PA. CODE CH. 6211 ]
Allowable Cost Reimbursement for Non-State Operated Intermediate Care Facilities for Persons with an Intellectual Disability
[42 Pa.B. 3261]
[Saturday, June 9, 2012]The Department of Public Welfare (Department) amends Chapter 6211 (relating to allowable cost reimbursement for non-Sate operated intermediate care facilities for persons with an intellectual disability) to read as set forth in Annex A under the authority of sections 201(2), 403(b) and 403.1 of the Public Welfare Code (code) (62 P. S. §§ 201(2), 403(b) and 403.1), as amended by the act of June 30, 2011 (P. L. 89, No. 22) (Act 22).
Omission of Proposed Rulemaking
On July 1, 2011, the General Assembly enacted Act 22, which amended the code. Act 22 added several new provisions to the code, including section 403.1. Section 403.1(a)(4), (c) and (d) of the code authorizes the Department to promulgate final-omitted regulations under section 204(1)(iv) of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. § 1204(1)(v)), known as the Commonwealth Documents Law (CDL), to establish or revise provider payment rates, reimbursement models and payment methodology. Section 204(1)(iv) of the CDL authorizes an agency to omit or modify notice of proposed rulemaking when a regulation relates to Commonwealth grants and benefits. The Medical Assistance Program is a Commonwealth grant program through which eligible recipients receive coverage of certain health care benefits. In addition, to ensure the Department's expenditures for State Fiscal Year 2011-2012 do not exceed the aggregate amount appropriated by the General Assembly, section 403.1 of the code expressly exempts these regulations from the Regulatory Review Act (71 P. S. §§ 745.1—745.12), section 205 of the CDL (45 P. S. § 1205) and section 204(b) of the Commonwealth Attorneys Act (71 P. S. § 732-204(b)).
The Department is amending Chapter 6211 in accordance with section 403.1 of the code. This final-omitted rulemaking revises the payment methodology for the establishment of the standard interim per diem rate for non-State operated intermediate care facilities for persons with an intellectual disability (previously referred to as non-State operated intermediate care facilities for the mentally retarded).
Purpose
The purpose of this final-omitted rulemaking is to revise the payment methodology for the standard interim per diem rate for non-State operated intermediate care facilities for persons with an intellectual disability (ICFs/ID) and non-State operated intermediate care facilities for persons with other related conditions (ICFs/ORC). Specifically, the Department is amending § 6211.16 (relating to establishment of standard interim per diem rate). In addition, the Department is replacing the term ''mental retardation'' with the term ''intellectual disability'' throughout this chapter.
Background
ICFs/ID and ICFs/ORC are facilities that provide Medicaid services defined in Title XIX of the Social Security Act (42 U.S.C.A. § 1396a(a)). ICFs/ID and ICFs/ORC are facilities which are designed to provide ''active treatment services'' to persons who are diagnosed with an intellectual disability or persons with other related conditions in accordance with 42 CFR 435.1010 (relating to definitions relating to institutional status). ICFs/ORC are included in § 6211.2 (relating to applicability) in accordance with 42 CFR 483.400 (relating to basis and purpose). To further provide clarity regarding the payment methodology that establishes the standard interim per diem rate for ICFs/ID-ICFs/ORC and to improve the cost effectiveness of these programs, the Department is promulgating this final-omitted rulemaking. The promulgation of this final-omitted rulemaking will enable the Commonwealth to ensure the Department's expenditures do not exceed the amount appropriated by the General Assembly for ICFs/ID and ICFs/ORC as required under Act 22.
Requirements
In this final-omitted rulemaking, the Department is amending § 6211.16. Subsection (c)(2) has been amended to delete references to the application of an inflationary factor and language has been added that the Department may apply a cost of living adjustment (COLA) to the interim per diem rates during the rate development process.
Section 6211.16 is also being amended by adding subsection (e). The addition of subsection (e) provides that the Department may apply a downward rate adjustment factor (RAF) to the standard interim per diem rate for each provider, including those providers who request a waiver of the standard interim per diem rate as specified in § 6211.31 (relating to request for waiver). The amount of funds resulting from the application of the RAF cannot be requested as a waiver of the standard interim per diem rate. The ability to apply a RAF enables the program to maintain fiscal stability and will enable the Commonwealth to ensure the Department's expenditures do not exceed the amount appropriated by the General Assembly.
The Department is also amending § 6211.31. Under subsection (a), to request additional funds for the fiscal year, the provider shall submit a request for a waiver of the standard interim per diem rate in accordance with the identified requirements under this subsection. Subsection (b) amends the deadline for waiver request submissions. Instead of the March 1 deadline for waiver request submissions to the Department, the subsection has been amended to provide an October 31 deadline of the fiscal year for which the waiver is being requested. This amendment aligns the regulation to current program practice.
Subsection (e)(2) is also amended to clarify that the written request for a waiver of the standard interim per diem rate must be in accordance with the budget instructions. Further, subsection (f) is amended to clarify that a provider with less than a 12-month cost report who fails to submit a request for waiver of the standard interim per diem rate, will have an interim per diem rate established under § 6211.15 (relating to failure to submit cost report).
Finally, the Department is amending the regulations to delete references to ''mental retardation'' and replacing this outdated language with ''persons with an intellectual disability.'' The Department is also replacing ''Office of Mental Retardation'' with ''the Department'' or ''the Office of Developmental Programs.''
Affected Individuals and Organizations
The final-omitted rulemaking affects providers who operate ICFs/ID and ICFs/ORC. The Department's ICF/ID and ICF/ORC program has approximately 178 service locations and 33 providers in this Commonwealth.
Accomplishments and Benefits
The final-omitted rulemaking clarifies and revises the rate setting methodology for standard interim per diem rates for ICF/ID and ICF/ORC providers to ensure fiscal stability within the program. The final-omitted rulemaking also replaces outdated terminology with current terminology.
Fiscal Impact
This final-omitted rulemaking ensures that the Department's expenditures do not exceed the aggregate amount appropriated by the General Assembly.
Paperwork Requirements
There are no new paperwork requirements under the final-omitted rulemaking.
Public Process
The Department discussed these payment rates and methodologies with the Medical Assistance Advisory Committee at the February 23, 2012, meeting. The Department posted the draft regulation on the Department's web site on February 24, 2012, with a 15-day comment period. The Department invited interested persons to submit written comments regarding the regulation to the Department. The Department received 39 comments from 16 commentators. The Department also discussed the Act 22 regulations and responded to questions at the House Health Committee hearing on March 8, 2012.
In addition, the Department published advance public notice at 42 Pa.B. 2110 (April 14, 2012) announcing its intent to amend Chapter 6211 regarding provider payment methodologies, rates and terminology. The Department invited interested persons to comment. The Department received five comment letters during this comment period. The comment letters were reflective of the comments previously received on the draft regulation.
The Department considered the comments received in response to the draft regulation.
Discussion of Comments
Following is a summary of the major comments received within the public comment period and the Department's responses to the comments.
Comment
The commentators disagreed with the removal of language related to an inflationary factor from § 6211.16(c)(2) and also disagreed with the addition of § 6211.16(e) related to the application of an RAF. In addition, a commentator requested language be added to § 6211.16(c)(2) related to a COLA.
Response
The Department is maintaining the removal of the inflationary factor and inclusion of the language related to the RAF. The amended language will improve cost efficiencies and provide fiscal stability of the program. The Department does agree with the comment to add language related to a COLA. Therefore, the Department revised § 6211.16(c)(2) to provide for consideration of a COLA to the interim per diem rates.
Comment
Several commentators suggested revisions to § 6211.1 (relating to purpose) and § 6211.2 to include State-operated ICFs/ID under this chapter.
Response
Chapter 6211 does not apply to State-operated ICFs/ID. Therefore, the Department did not amend these sections.
Comment
Several commentators stated the language was unclear in § 6211.31(f).
Response
The Department is maintaining the language in § 6211.31(f). Under subsection (a)(1), a facility that has been certified as an ICF/ID for less than 18 months prior to the closing date of the most recently submitted cost report may submit a waiver of the interim per diem rate. Subsection (f) further outlines that if a provider with less than a 12-month cost report does not submit a request for a waiver of the standard interim per diem rate under subsection (a)(1), a rate will be established under § 6211.15. The amended language will enable the Department to maintain consistency in the establishment of interim per diem rates for each provider.
Regulatory Review Act
Under section 403.1 of the code, this final-omitted rulemaking is not subject to the Regulatory Review Act.
Findings
The Department finds that:
(1) Notice of proposed rulemaking is omitted in accordance with section 204(1)(iv) of the CDL, 1 Pa. Code § 7.4(1)(iv) and section 403.1(d) of the code because the regulations relate to Commonwealth grants and benefits.
(2) The adoption of this final-omitted rulemaking in the manner provided by this order is necessary and appropriate for the administration and enforcement of the code.
Order
The Department, acting under the code, orders that:
(a) The regulations of the Department, 55 Pa. Code Chapter 6211, are amended by amending §§ 6211.1, 6211.2, 6211.4, 6211.11—6211.16, 6211.31, 6211.32, 6211.47, 6211.64, 6211.74, 6211.82, 6211.121, 6211.124 and 6211.131—6211.133 to read as set forth in Annex A, with ellipses referring to the existing text of the regulations.
(b) The Secretary of the Department shall submit this order and Annex A to the Office of General Counsel for approval as to legality and form as required by law.
(c) The Secretary of the Department shall certify and deposit this order and Annex A with the Legislative Reference Bureau as required by law.
(d) This order shall take effect July 1, 2011, in accordance with section 403.1(e) of the code.
GARY D. ALEXANDER,
SecretaryFiscal Note: 14-534. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 55. PUBLIC WELFARE
PART VIII. INTELLECTUAL DISABILITY MANUAL
Subpart C. ADMINISTRATION AND FISCAL MANAGEMENT
CHAPTER 6211. ALLOWABLE COST REIMBURSEMENT FOR NON-STATE OPERATED INTERMEDIATE CARE FACILITIES FOR PERSONS WITH AN INTELLECTUAL DISABILITY
GENERAL PROVISIONS § 6211.1. Purpose.
This subchapter specifies the requirements for MA reimbursement and allowable costs for non-State operated intermediate care facilities for persons with an intellectual disability.
§ 6211.2. Applicability.
(a) This chapter applies to non-State operated intermediate care facilities for persons with an intellectual disability and non-State operated intermediate care facilities for persons with other related conditions.
(b) The following chapters apply to non-State operated intermediate care facilities for persons with an intellectual disability and non-State operated intermediate care facilities for persons with other related conditions: Chapters 1101 and 6210 (relating to general provisions; and participation requirements for the intermediate care facilities for the mentally retarded program).
(c) In addition to this chapter, the Medicare Provider Reimbursement Manual (HIM-15) applies for costs that are included in this chapter as allowable and for reimbursable costs that are not specifically addressed in this chapter.
(d) If this subchapter is inconsistent with Chapter 6210 or HIM-15, this chapter shall prevail.
§ 6211.4. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Cost report—A summary of client occupancy, income and expenses for a given period, presented in a manner and on a form prescribed by the Department.
* * * * * Facility—A non-State operated intermediate care facility for persons with an intellectual disability or a non-State operated intermediate care facility for persons with other related conditions.
* * * * * Standard interim per diem rate—The rate established by the Department in accordance with § 6211.16 (relating to establishment of standard interim per diem rate) for the purpose of making interim payments to the facility pending a year-end cost settlement.
* * * * *
STANDARD INTERIM PER DIEM RATE § 6211.11. Basis for standard interim per diem rate.
The standard interim per diem rate for each provider is based upon the cost report submitted to the Department by the provider.
§ 6211.12. Submission of cost report.
(a) The provider shall submit a written report of the costs for the previous Fiscal Year to the Department by September 30 of each year, unless an extension is granted in accordance with procedures in the cost report.
(b) The cost report shall reflect at least 12 months of operation.
(c) The cost report shall be submitted on the form prescribed by the Department.
§ 6211.13. Review of cost report.
The Department will review the cost report submitted by the provider for correctness, consistency with previous audits and cost reports, and compliance with the instructions for the cost report.
§ 6211.14. Adjustments to cost report.
(a) The Department will adjust the cost report based upon the findings of closed audits and cost settlements.
(b) The Department will inform the provider in writing of adjustments to the submitted cost report by January 1 of each year, unless an extension is granted under § 6211.12(a) (relating to submission of cost report).
(c) If the Department does not inform the provider in writing of adjustments to the submitted cost report by January 1 of each year, the cost report submitted by the provider is accepted by the Department.
§ 6211.15. Failure to submit cost report.
If the provider does not submit a cost report by September 30 of each year, or later if an extension is granted by the Department under the procedures of the cost report, the Department will establish an interim per diem rate for the provider equal to the lowest interim rate for any non-State operated intermediate care facility for persons with an intellectual disability issued for the current fiscal year.
§ 6211.16. Establishment of standard interim per diem rate.
(a) The standard interim per diem rate shall be used for billing purposes throughout the current fiscal year.
(b) The standard interim per diem rate shall be established by dividing the total projected operating cost by 98% of the maximum possible number of days based on the number of certified beds of the facility.
(c) The total projected operating cost is derived under the following procedures:
(1) Taking the total MA allowable costs, including adjustments for income, and comparing this to the approved budget total, or the total projected operating costs if applicable, for the same fiscal year in order to determine the lesser amount. From the lesser amount, subtract depreciation on capital assets, limited to buildings and fixed equipment, and interest on capital indebtedness.
(2) The Department may apply a cost of living adjustment to the interim per diem rate during the rate development process.
(3) Adding depreciation on capital assets, limited to buildings and fixed equipment, and interest on capital indebtedness to the total projected cost to result in the total projected operating cost.
(d) The cost report submitted by the provider, in addition to adjustments made by the Department, as specified in § 6211.14 (relating to adjustments to cost report), shall be used for the calculation of the standard interim per diem rate.
(e) The Department may apply a downward rate adjustment factor to the standard interim per diem rate for each provider to remain within the amount appropriated by the General Assembly, including those providers who request a waiver of the standard interim per diem rate as specified in § 6211.31 (relating to request for waiver). The amount of funds resulting from the application of the rate adjustment factor cannot be requested as a waiver of the standard interim per diem rate as identified under § 6211.31.
WAIVER OF STANDARD INTERIM PER
DIEM RATE§ 6211.31. Request for waiver.
(a) To request additional funds for the fiscal year, the provider shall submit a request for a waiver of the standard interim per diem rate in accordance with the requirements of this section. A request can only be submitted if one or more of the following conditions exist:
(1) The facility has been certified as an ICF/ID for less than 18 months prior to the closing date of the most recently submitted cost report.
(2) There has been an increase or decrease in the certified capacity of a facility during the current fiscal year.
(3) An increase or decrease in the certified capacity is anticipated for the next fiscal year.
(4) The characteristics of a client have changed significantly causing significant program changes, resulting in demonstrably different costs.
(5) An unforeseen circumstance has resulted in demonstrably different costs.
(6) The facility has changed ownership.
(b) The request for waiver shall be submitted to the Department in writing by October 31 of the fiscal year for which the waiver is being requested.
(c) A waiver request may not be submitted for more than 1 fiscal year at a time.
(d) If there is an unforeseen circumstance that affects the providers' cost, the request for waiver shall occur during the current fiscal year. The provider shall request a budget review in writing immediately after the change occurs.
(e) A written request for a waiver of the standard interim per diem rate shall include all of the following:
(1) Identification of the specific condition in subsection (a) that exists.
(2) A proposed budget and a proposed per diem rate, on forms and in accordance with the budget instructions prescribed by the Department.
(3) A detailed profile of the providers' costs prior to and after the change.
(4) Detailed justification for the waiver.
(5) The fiscal year for which the waiver is being requested.
(f) For a provider with less than a 12-month cost report who does not submit a request for waiver of the standard interim per diem rate based under subsection (a)(1), an interim per diem rate will be established based upon § 6211.15 (relating to failure to submit cost report).
§ 6211.32. Approved waiver.
(a) After the Department has notified the provider that a waiver has been granted, the Department will establish the total approved revised budget level.
(b) If a waiver is granted, the Department will establish budget levels by major object of expenditure and cost center. The budget level will be based on this chapter and HIM-15.
(c) If a waiver is granted, the Department will establish an interim per diem rate by dividing the total approved budget level minus offsetting income, by 98% of the maximum potential certified occupancy or the occupancy percentage requested by the provider in the budget, whichever is higher.
(d) If a waiver is granted, the interim per diem rate shall be used for billing purposes throughout the fiscal year.
REIMBURSEMENT § 6211.47. Operation of multiple program types.
(a) If a provider operates intermediate care facilities for persons with an intellectual disability as well as other types of programs, the provider shall document at the time of audit, or if a waiver is requested the provider shall submit with the budget a detailed account of how various costs are allocated between the multiple programs, under § 6211.72 (relating to administrative costs).
(b) The detailed account of the allocation shall include at least all of the following:
(1) All salary costs for individuals responsible for more than one program.
(2) Employee fringe benefits for individuals responsible for more than one program.
(3) All rental costs that apply to multiple programs.
(4) All motor vehicles that are used by multiple programs.
(5) All other related expenses shared by multiple programs.
BED OCCUPANCY § 6211.64. Waiver of minimum occupancy rate.
A provider may request a waiver of the minimum occupancy requirement at the time that a final cost report is submitted to the Department. The request for waiver of the minimum occupancy requirement shall be submitted in writing to the Deputy Secretary for Office of Developmental Programs. Documentation shall be submitted related to one or more of the following conditions:
(1) The facility is in its first year of operation.
(2) The facility is increasing or decreasing the number of certified beds.
(3) The facility operates less than 16 beds.
ALLOWABLE COSTS § 6211.74. Service contracts.
Costs necessary for the operation of the facility and the establishment and maintenance of intermediate care facilities for persons with an intellectual disability certification are allowable to the extent that the costs do not duplicate services performed by staff on complement. Service contracts shall specify the nature and cost of the service. Documentation of service contracts shall be maintained by the facility with all documentation of services rendered.
§ 6211.82. Rental costs.
* * * * * (c) Exceptions to subsection (b) are allowed only upon advance approval from the Deputy Secretary for the Office of Developmental Programs or a designee. Approval will be based on a fair market rental appraisal as outlined in subsection (e), or documented costs of ownership, except that return on equity is not permitted. The provider is permitted to include documented mortgage interest charges and depreciation.
* * * * *
BUDGET § 6211.121. Submission of the budget.
(a) For new programs that have never participated in the Intermediate Care Facility for persons with an intellectual disability program, or programs that have participated in the program for less than 12 months, a budget shall be prepared and submitted to the Department in accordance with forms and instructions provided by the Department.
(b) If a waiver of the standard interim per diem rate is requested, a budget shall be submitted to the Department in accordance with § 6211.31(e) (relating to request for waiver) and shall be prepared in accordance with forms and instructions provided by the Department.
§ 6211.124. Budget adjustments.
(a) The provider is permitted to move funds between major objects of expenditure and cost centers, within 10% of the approved amount per major object of expenditure and cost center, during the course of the fiscal year.
(b) Movement of funds greater than 10% requires submission of budget adjustment and shall meet the following conditions:
(1) Changes shall remain within the limit of the total approved budget level.
(2) Requests for adjustment shall be filed during the fiscal year in which the rate is effective, and budget adjustments may be filed a maximum of two per fiscal year.
(3) Budget adjustments shall be submitted on forms prescribed by the Department and in accordance with applicable instructions.
MOVEMENT OF FUNDS § 6211.131. Conditions for movement of funds.
(a) Agencies that operate multiple programs shall be permitted to move up to 10% of the approved funding level of a program across other programs the facility operates.
(b) Movement of funds shall be permitted only once per Commonwealth fiscal year.
(c) The request for movement of funds shall be submitted to the Department by May 31 of the fiscal year for which the movement of funds is requested.
(d) Movement of funds will not be approved if there is an increase in the sum of the already approved funding levels for each of the programs the agency operates.
(e) Movement of funds shall be limited to 10% of a program's approved funding level.
(f) Movement of funds may be directed from several programs to a single program.
§ 6211.132. Documentation.
(a) Agencies requesting the movement of funds shall submit revised program budget pages to the Department for affected programs.
(b) For programs affected by the change with standard interim rates, a program budget page is not required. The agency shall document to the Department the change in the total projected operating cost as a result of the movement of funds.
§ 6211.133. Related procedures.
The Department will not process gross adjustments as a result of an approved request to move funds across programs and revised interim rates will not be issued.
[Pa.B. Doc. No. 12-1044. Filed for public inspection June 8, 2012, 9:00 a.m.]
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