NOTICES
Payment for Nursing Facility Services Provided by County and Nonpublic Nursing Facilities; Notice of Change in Methods and Standards of Setting Payment Rates
[37 Pa.B. 3036]
[Saturday, June 30, 2007]The purpose of this announcement is to provide advance notice that the Department of Public Welfare (Department) intends to make changes in its methods and standards for payment of Medical Assistance (MA) nursing facility services beginning in Fiscal Year (FY) 2007-2008.
The Department initially provided advance notice of its intention to apply a budget adjustment factor (BAF) for rate setting year 2007-2008 to nonpublic nursing facility payment rates in a public notice published at 36 Pa.B. 1804 (April 15, 2006) and provided advance notice of its intention to apply a BAF for rate setting year 2007-2008 to county nursing facility payment rates 36 Pa.B. 1803 (April 15, 2006).
Under 55 Pa. Code §§ 1187.96(e)(2)(iv) and 1189.91 (relating to price and rate setting computations; and per diem rates for county nursing facilities), the Department intends to follow the formulas set forth in the Commonwealth's approved State Plan to determine the BAFs for rate setting year 2007-2008. The Department recently submitted State Plan Amendments (SPA) 07-007 and 07-008 to the Federal Centers for Medicare and Medicaid Services to include, among other things, the BAF formulas which the Department will use in rate setting year 2007-2008. As set forth in SPA 07-007 (nonpublic nursing facilities) and SPA 07-008 (county nursing facilities), the Department will use the following formulas to determine the BAFs for nonpublic and county nursing facilities respectively.
For rate setting year 2007-2008, the BAFs that will be applied to county and nonpublic nursing facility payment rates for MA nursing facility services shall limit the estimated aggregate increase in the Statewide day-weighted average payment rate over the 3-year period commencing July 1, 2005, and ending June 30, 2008, from the Statewide day-weighted average payment rate for MA nursing facility services in FY 2004-2005 to 6.912% plus any percentage rate of increase permitted by the amount of funds appropriated for nursing facility services in the General Appropriations Act of 2007. The proposed percentage rate of increase appropriated for nursing facility services in the Governor's Executive Budget is 2%. Assuming this additional percentage rate of increase, the aggregate percentage increase in the Statewide day-weighted average over the 3-year period is 9.05%.
By measuring the rate of increase over the 3-year period commencing July 1, 2005, the Department intends both to confirm the BAFs that were adopted for the two prior fiscal years and incorporated in the approved State Plan, and to negate any fiscal consequences that could occur if those earlier BAFs are determined invalid. To achieve these goals, this amendment will authorize adjustments to FY 2007-2008 rates as are necessary to ensure that the increase in payment rates during the 3-year period from July 2005, to June 2008, is limited to the amounts appropriated in the General Fund Budgets for payment for nursing facility services provided to MA recipients.
As specified in the preamble to the rulemaking authorizing the BAF in FY 2005-2006, the ''Statewide day-weighted average rate'' is an estimate of the average rate that the Department will pay for nursing facility services during a fiscal year. ''Statewide'' means that all nursing facility payment rates are included in the calculation. ''Day-weighted'' means that the average reflects the number of days of care that are paid for at a given rate. See 35 Pa.B. 6233, n.1 (November 12, 2005). When the Department adopted the BAF in FY 2005-2006, the Department estimated the Statewide day-weighted average rate for FY 2004-2005 to be $166.37. Application of the BAF resulted in a 2.8% in FY 2005-2006 and a 4% increase in FY 2006-2007, for a 2-year cumulative increase of 6.912% in the Statewide day-weighted average from $166.37 to $177.87. Under this amendment, the Department will again use the estimated Statewide day-weighted rate for FY 2004-2005 as the starting point, and implement a BAF to permit the further increase in the estimated Statewide day-weighted average rate. If the General Assembly appropriates funds for payment of MA nursing facility services consistent with level of funding set forth in the Governor's Executive Budget, the Department expects the estimated Statewide day-weighted average rate to increase from $166.37 to $181.43, a 3-year cumulative increase of 9.05%.
To limit the increase in the Statewide day-weighted average rate for FY 2007-2008 to $181.43, the Department intends to use the following formula to determine the BAF which will apply in setting rates for nonpublic nursing facilities:
* (nonpublic nursing facilities' share of total appropriated funds + estimated annual patient pay amount) divided by
* estimated acuity-adjusted annual payments
The nonpublic nursing facility's share of the total appropriated funds will be 81.0147% of the amount included in the General Appropriations Act for nursing facility per diem payments. If the General Assembly appropriates the level of funding set forth in the Governor's Executive Budget, the nonpublic BAF produced by this formula will be .93789.
A nonpublic nursing facility's case-mix per diem rate for an MA resident day will be the sum of the nursing facility's three net operating components and its capital rate component, multiplied by the BAF.
The formula for this BAF as it applies to county nursing facilities is as follows:
* BAF = 1.00 + the percent increase permitted by the General Appropriations Act
If the General Assembly appropriates the level of funding set forth in the Governor's Executive Budget, the county BAF produced by this formula will be 1.02.
A county nursing facility's per diem rate for an MA resident will be the facility's July 1, 2006, per diem rate as calculated under 55 Pa. Code Chapter 1189, Subchapter D (relating to rate setting) and 55 Pa. Code § 1189.91(b) multiplied by the BAF.
If the General Assembly appropriates a level of funding that permits a different rate of increase than that which is reflected in the Governor's Executive Budget, the Department will recalculate the BAF using the same formula described in this notice. In addition, if the BAFs from the prior two fiscal years are invalidated, the Department will also recalculate the BAF using the same formula to ensure that the cumulative rate of increase over the three fiscal periods ending June 2008 is limited to 9.05%, or the percentage rate of increase permitted by the appropriated amounts for MA nursing facility services. Application of the BAFs in FY 2007-2008 is subject to Federal approval of the amendments to the Commonwealth's State Plan.
Fiscal Impact
This change will result in an estimated savings of $60.838 million in total funds ($27.889 million in State funds) in FY 2007-2008.
Public Comment
Interested persons are invited to submit written comments regarding the BAF formula to the Department of Public Welfare, Bureau of Long-Term Living Support, Attention: Gail Weidman, P. O. Box 2675, Harrisburg, PA 17105. Comments received within 30 days will be reviewed and considered for any subsequent revision of the notice.
Persons with a disability who require an auxiliary aid or service may submit comments using the AT&T Relay Services at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).
ESTELLE B. RICHMAN,
SecretaryFiscal Note: 14-NOT-516. (1) General Fund; (2) Implementing Year 2006-07 is $0; (3) 1st succeeding Year 2007-08 is $27,889,000; 2nd succeeding Year 2008-09 is $30,424,000; 3rd succeeding Year 2009-10 is $30,424,000; 4th succeeding Year 2010-11 is $30,424,000; 5th succeeding Year 2011-12 is $30,424,000; (4) 2005-06 Program--$817,890,000; 2004-05 Program--$476,116,000; 2003-04 Program--$588,528,000; (7) Medical Assistance-Long Term Care; (8) recommends adoption. Funds have been included in the budget to cover these increases.
[Pa.B. Doc. No. 07-1162. Filed for public inspection June 29, 2007, 9:00 a.m.]
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