PROPOSED RULEMAKING
DEPARTMENT OF
PUBLIC WELFARE
[55 PA. CODE CHS. 1187 AND 1189]
Rate Setting for County Nursing Facilities that Change Ownership
[43 Pa.B. 5822]
[Saturday, October 5, 2013]The Department of Public Welfare (Department), under the authority of sections 201(2), 206(2), 403(b) and 443.1 of the Public Welfare Code (62 P. S. §§ 201(2), 206(2), 403(b) and 443.1), proposes to amend Chapters 1187 and 1189 (relating to nursing facility services; and county nursing facility services) to read as set forth in Annex A.
Purpose of Proposed Rulemaking
The purpose of this proposed rulemaking is to amend § 1187.97 (relating to rates for new nursing facilities, nursing facilities with a change of ownership, reorganized nursing facilities and former prospective payment nursing facilities) to codify the rate setting methodology used when a county nursing facility has a change of ownership from county ownership to a nonpublic nursing facility provider. The Department is also proposing to amend the terminology used in certain definitions in §§ 1187.2 and 1189.2 (relating to definitions).
The proposed rulemaking is needed to codify the methodology for setting rates for county nursing facilities that change ownership to a nonpublic nursing facility provider. Since county nursing facilities have been phased-out of the rate-setting process under Chapter 1187, updated cost data audited to verify compliance with Chapter 1187 is no longer available to establish a per diem rate for a former county nursing facility.
Background
Beginning July 1, 2006, the Department established a new payment methodology for county nursing facility providers, as described in Chapter 1189. From July 1, 2006, through June 30, 2012, when a county nursing facility changed ownership, the per diem rate for the nursing facility was computed in accordance with § 1187.96 (relating to price- and rate-setting computations), using the cost data contained in the Nursing Information System (NIS) database. Since county nursing facilities have been fully phased-out of the rate-setting process for nonpublic nursing facilities under § 1187.98 (relating to phase-out median determination), their cost data is no longer audited to verify compliance under Chapter 1187; hence, county nursing facility cost data is not updated in the NIS database. In addition, per diem rates for county nursing facilities calculated in accordance with § 1189.91 (relating to per diem rates for county nursing facilities) do not contain identifiable net operating or capital rates which would otherwise be assigned to a new provider when a nursing facility changes ownership as referenced in § 1187.97(2)(i). Therefore, the Department proposes to codify the use of peer group prices to determine the net operating portion of the per diem rate until audited cost report data from the new provider is available for use in the rebasing process. In addition, the Department proposes to codify the use of the fixed property component, when applicable, to determine the capital portion of the per diem rate until audited cost report data from the new provider is available for use in the rebasing process.
A public notice was published at 42 Pa.B. 6839 (October 27, 2012) in which the Department announced it was amending its methods and standards for payment of Medical Assistance (MA) nursing facility services to a county nursing facility that changes ownership to a nonpublic nursing facility provider. Also, State Plan Amendment 12-031 was submitted by the Department on December 21, 2012. It was approved by the Centers for Medicare and Medicaid Services on February 25, 2013.
Requirements
This rulemaking proposes to amend § 1187.97 to codify the rate setting methodology for changes of ownership when a county nursing facility has a change in ownership to a nonpublic nursing facility provider.
For county nursing facilities that change ownership, the Department is proposing to determine the per diem rate using the peer group price for resident care, other resident related and administrative costs from the appropriate peer group until the nursing facility's cost report submitted by the new provider is audited for use in the rebasing process. The resident assessment data from the former county nursing facility will be used to establish the MA Case-Mix Index (CMI) to calculate the resident care rate. The fixed property component will be the only component of the capital portion of the case-mix rate, if the nursing facility's beds are eligible, until the nursing facility's cost report submitted by the new provider is audited for use in the rebasing process. Under § 1187.97(2), the Department is also proposing to add ''or county nursing facility'' after each reference of ''old nursing facility provider'' in subparagraphs (ii) and (iii) (proposed subparagraphs (iii) and (iv)).
In addition, under § 1187.97(1)(i), references to a former county nursing facility are proposed to be deleted because the proposed amendments to § 1187.97(2) specifically address county nursing facilities that change ownership. Clause (B) is proposed to be deleted and the following clause is proposed to be renumbered.
The Department also added clarifying language to the definitions of ''county nursing facility'' in § 1187.2 and ''new county nursing facility'' in § 1189.2 to define the word ''controlled'' for purposes of these definitions. The Department proposes to replace the outdated language ''mentally retarded'' with ''intellectual disability.''
Affected Individuals and Organizations
This proposed rulemaking will affect a county nursing facility that changes ownership from county ownership to a nonpublic nursing facility provider and remains in the MA Program.
Accomplishments and Benefits
This proposed rulemaking will codify the rate setting methodology for county nursing facilities that change ownership to a nonpublic nursing facility provider and remain in the MA Program.
Fiscal Impact
Cost to the Commonwealth, local government, nursing facility providers or MA recipients is not anticipated as a result of this proposed rulemaking.
Paperwork Requirements
There are no new or additional paperwork requirements.
Effective Date
This proposed rulemaking will be effective upon final-form publication in the Pennsylvania Bulletin.
Public Comment
Interested persons are invited to submit written comments, suggestions or objections regarding the proposed rulemaking to the Department of Public Welfare, Office of Long-Term Living, Bureau of Policy and Regulatory Management, Attention: Marilyn Yocum, P.O. Box 8025, Harrisburg, PA 17105-8025 within 30 calendar days after the date of publication of this proposed rulemaking in the Pennsylvania Bulletin. Reference Regulation No. 14-536 when submitting comments.
Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).
Regulatory Review Act
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on September 20, 2013, the Department submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Human Services and the Senate Committee on Public Health and Welfare. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Department, the General Assembly and the Governor of comments, recommendations or objections raised.
BEVERLY D. MACKERETH,
SecretaryFiscal Note: 14-536. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 55. PUBLIC WELFARE
PART III. MEDICAL ASSISTANCE MANUAL
CHAPTER 1187. NURSING FACILITY SERVICES
Subchapter A. GENERAL PROVISIONS § 1187.2. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * County nursing facility—
(i) A long-term care nursing facility that is:
(A) Licensed by the Department of Health.
(B) Enrolled in the MA program as a provider of nursing facility services.
(C) Controlled by the county institution district or by county government if no county institution district exists.
(ii) For the purposes of this definition, ''controlled'' in clause (C) means the power to direct or cause to direct the management and policies of the nursing facility, whether through equitable ownership of voting securities or otherwise.
(iii) The term does not include intermediate care facilities for [the mentally retarded] persons with an intellectual disability controlled or totally funded by a county institution district or county government.
* * * * * Nursing facility—
* * * * * (ii) The term does not include intermediate care facilities for [the mentally retarded] persons with an intellectual disability, Federal or State-owned long-term care nursing facilities, Veteran's homes or county nursing facilities.
* * * * * Target applicant or resident—An individual with a serious mental illness, [mental retardation] intellectual disability or other related condition seeking admission to or residing in a nursing facility.
* * * * *
Subchapter G. RATE SETTING § 1187.97. Rates for new nursing facilities, nursing facilities with a change of ownership, reorganized nursing facilities and former prospective payment nursing facilities.
The Department will establish rates for new nursing facilities, nursing facilities with a change of ownership, reorganized nursing facilities and former prospective payment nursing facilities as follows:
(1) New nursing facilities.
(i) The net operating portion of the case-mix rate is determined as follows:
(A) A new nursing facility[, unless a former county nursing facility,] will be assigned the Statewide average MA CMI until assessment data submitted by the nursing facility under § 1187.33 (relating to resident data and picture date reporting requirements) is used in a rate determination under § 1187.96(a)(5) (relating to price- and rate-setting computations). Beginning, July 1, 2010, the Statewide average MA CMI assigned to a new nursing facility will be calculated using the RUG-III version 5.12 44 group values in Appendix A and the most recent classifiable assessments of any type. When a new nursing facility has submitted assessment data under § 1187.33, the CMI values used to determine the new nursing facility's total facility CMIs and MA CMI will be the RUG-III version 5.12 44 group values and the resident assessment that will be used for each resident will be the most recent classifiable assessment of any type.
(B) [For a former county nursing facility, the county nursing facility's assessment data and MA CMI will be transferred to the new nursing facility.
(C)] The nursing facility will be assigned to the appropriate peer group. The peer group price for resident care, other resident related and administrative costs will be assigned to the nursing facility until there is at least one audited nursing facility cost report used in the rebasing process. Beginning July 1, 2010, a new nursing facility will be assigned the peer group price for resident care that will be calculated using the RUG-III version 5.12 44 group values in Appendix A and the most recent classifiable assessments of any type.
* * * * * (2) Nursing facilities with a change of ownership and reorganized nursing facilities.
(i) New provider. The new nursing facility provider will be paid exactly as the old nursing facility provider, except that, if a county nursing facility becomes a nursing facility between July 1, 2006, and June 30, 2012, the per diem rate for the nursing facility will be computed in accordance with § 1187.96, using the data contained in the NIS database. Net operating and capital rates for the old nursing facility provider will be assigned to the new nursing facility provider.
(ii) If a county nursing facility has a change of ownership from county ownership to a nonpublic nursing facility provider, the nursing facility will be assigned to the appropriate peer group in accordance with § 1187.94 (relating to peer grouping for price setting) and the per diem rate for the nursing facility will be calculated as follows:
(A) The net operating portion of the case-mix rate is determined in accordance with § 1187.96 using the peer group price for resident care, other resident related and administrative costs until a nursing facility's cost report submitted by the new nursing facility provider is audited for use in the rebasing process.
(B) The capital portion is determined using only the fixed property component to the extent the facility is eligible for the capital portion of the case mix rate, in accordance with § 1187.96(d)(1), until a nursing facility's cost report submitted by the new nursing facility provider is audited for use in the rebasing process.
(iii) Transfer of data. Resident assessment data will be transferred from the old nursing facility or the county nursing facility provider number to the new nursing facility provider number. The old nursing facility's or county nursing facility's MA CMI will be transferred to the new nursing facility provider.
[(iii)] (iv) Movable property cost policies.
(A) The acquisition costs of items acquired by the old nursing facility provider or county nursing facility on or before the date of sale are costs of the old nursing facility provider or county nursing facility, and not the new nursing facility provider.
(B) Regardless of the provisions of any contract of sale, the amount paid by the new nursing facility provider to acquire or obtain any rights to items in the possession of the old nursing facility provider or county nursing facility is not an allowable cost.
(C) If the new nursing facility provider purchases an item from the old nursing facility provider or county nursing facility, the cost of that item is not an allowable cost for cost reporting or rate setting purposes.
(D) If the new nursing facility provider rents or leases an item from the old nursing facility provider or county nursing facility, the cost of renting or leasing that item is not an allowable cost for cost reporting or rate setting purposes.
* * * * *
CHAPTER 1189. COUNTY NURSING FACILITY SERVICES
Subchapter A. GENERAL PROVISIONS § 1189.2. Definitions.
* * * * * (b) The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * New county nursing facility—
(i) One of the following:
[(i)] (A) A newly constructed, licensed and certified county nursing facility.
[(ii)] (B) An existing nursing facility that through a change of ownership, is controlled by the county institution district or by county government if no county institution district exists.
(ii) For the purposes of this definition, ''controlled'' in clause (B) means the power to direct or cause to direct the management and policies of the nursing facility, whether through equitable ownership of voting securities or otherwise.
* * * * *
[Pa.B. Doc. No. 13-1851. Filed for public inspection October 4, 2013, 9:00 a.m.]
No part of the information on this site may be reproduced for profit or sold for profit.This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
