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PA Bulletin, Doc. No. 11-1704


Payments to Nonpublic Nursing Facilities; Final Rates for State Fiscal Year 2010-2011

[41 Pa.B. 5246]
[Saturday, October 1, 2011]

 This notice announces the Department of Public Welfare's (Department) final annual case-mix per diem payment rates for State Fiscal Year (FY) 2010-2011 for nonpublic nursing facilities that participate in the Medical Assistance (MA) Program.

 As required by the case-mix payment methodology set forth in 55 Pa. Code Chapter 1187, Subchapter G (relating to rate setting), the Department annually sets an annual MA per diem rate for each nonpublic nursing facility provider. Each facility's annual per diem rate is comprised of four components: resident care; other resident related; administrative; and capital.

 In the final-form rulemaking Transition to RUG-III Version 5.12 and Latest Assessment published at 41 Pa.B. 4630 (August 27, 2011), the Department made changes to the payment methodology to phase in the use of the Minimum Data Set Resource Utilization Group III version 5.12 44 Grouper (RUG v 5.12) and the most recent classifiable resident assessments in calculating the case-mix indices used to establish resident care peer group prices and for making the quarterly adjustments to the resident care rate components. To mitigate any adverse impact of this change on nonpublic nursing facilities, the Department amended 55 Pa. Code § 1187.96 (relating to price- and rate-setting computations) to authorize a 3-year phase-in period beginning July 1, 2010, and ending June 30, 2013. The phase-in only affects the resident care component of a facility's case-mix per diem rate. The resident care rate used to establish a nursing facility's case-mix per diem rate is a blended resident care rate which consists of a portion of the resident care rate calculated using the previous RUG version 5.01 Grouper (RUG v 5.01) and the most recent comprehensive resident assessments and a portion of the resident care rate calculated using RUG v 5.12 and the most recent classifiable resident assessments. For FY 2010-2011, the nursing facility's blended resident care rate will equal 75% of the nursing facility's RUG v 5.01 resident care rate from the prior rate quarter adjusted by the percent increase or decrease in the RUG v 5.12 resident care rate and 25% of the nursing facility's RUG v 5.12 resident care rate.

 The act of July 4, 2008 (P. L. 557, No. 44) (Act 44), among other things, directed the Department to phase-out the use of county nursing facility costs in nonpublic nursing facility rate setting over a period of 3 rate years, beginning with FY 2009-2010 and ending on June 30, 2012. Consistent with Act 44, the Department is continuing to include county nursing facilities in determining peer groups in accordance with 55 Pa. Code § 1187.94(1)(v) (relating to peer grouping for price setting) for the rate year 2010-2011. Once peer groups were determined, the Department calculated an interim median by adding each county nursing facility's costs from the three most recent audited cost reports or their reported costs if audited costs were not available to a noncollapsed peer group based on bed size and Metropolitan Statistical Area group. For rate year 2010-2011, the phase-out median equals 50% of the interim median plus 50% of the median calculated in accordance with 55 Pa. Code § 1187.98(b)(2) (relating to phase-out median determination).

 Act 44 also directed the Department to apply a budget adjustment factor (BAF) in calculating rates for MA nonpublic and county nursing facilities for the rate year 2010-2011, subject to the Federal Centers for Medicare and Medicaid Services (CMS) approval of an amendment to the Commonwealth State Plan. CMS approved State Plan Amendment (SPA) 09-018 on September 22, 2010. SPA 09-018 states that the BAF for rate setting year 2010-2011 shall limit the estimated aggregate change in the Statewide day-weighted average payment rate for MA nursing facility services for county and nonpublic nursing facilities so that the aggregate percentage rate of increase for the period that begins July 1, 2010, and ends on June 30, 2011, is limited to the amount permitted by the funds appropriated by the General Appropriations Act of 2010. For the rate setting year, beginning July 1, 2010, and ending June 30, 2011, the BAF for nonpublic nursing facilities is equal to 0.91280.

 The final annual per diem rates for FY 2010-2011 are available on the website for the Department at: and at local county assistance offices throughout this Commonwealth or by contacting Marilyn Yocum, Department of Public Welfare/Department of Aging, Office of Long-Term Living, (717) 705-3705.

Public Process

 The Department published a notice announcing its proposed nonpublic per diem payment rates for FY 2010-2011 at 40 Pa.B. 3630 (June 26, 2010) and invited interested persons to submit comments. No comments were received by the Department in response to the proposed rate notice.


 Following publication of this notice, the Department will send rate letters to each nonpublic MA nursing facility to notify the facilities of their final rates for FY 2010-2011. The rate letter will also advise the facility that it may file an administrative appeal if the facility believes that the Department made any errors or otherwise disagrees with its final rates for FY 2010-2011. A provider's appeal must be in writing and filed with the Department's Bureau of Hearings and Appeals, 2330 Vartan Way, 2nd Floor, Harrisburg, PA 17110-9721, within 33 days of the date of the Department's letter notifying the facility of its final rates. Facilities should refer to 67 Pa.C.S. Chapter 11 (relating to Medical Assistance hearings and appeals) and to the Department's regulations in 55 Pa. Code Chapter 41 (relating to Medical Assistance provider appeal procedures) for more detail regarding their appeal rights and the requirements related to written appeals.

Fiscal Impact

 The change in payment rates will result in an estimated increased cost of $28.176 million ($12.619 million in State funds) for per diem rate payments to nonpublic nursing facilities' FY 2010-2011 rates compared to the facilities' final FY 2009-2010 per diem rates. Funding for these changes has been included in the MA Long-Term Care appropriation.

Public Comment

 Interested persons are invited to submit written comments regarding this notice to the Department of Public Welfare/Department of Aging, Office of Long-Term Living, Bureau of Policy and Strategic Planning, Attention: Marilyn Yocum, Forum Place, 5th Floor, 555 Walnut Street, Harrisburg, PA 17101-1919. 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 Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).


Fiscal Note: 14-NOT-716. (1) General Fund; (2) Implementing Year 2010-11 is $0*; (3) 1st Succeeding Year 2011-12 is $25,238,000*; 2nd Succeeding Year 2012-13 is $12,619,000; 3rd Succeeding Year 2013-14 is $12,619,000; 4th Succeeding Year 2014-15 is $12,619,000; 5th Succeeding Year 2015-16 is $12,619,000; *Due to a delay in the implementation of the July 1, 2010, rates, the estimated program cost for 2011-12 includes the processing of retroactive rate adjustments for 2010-11; (4) 2010-11 Program—$713,831,000; 2009-10 Program—$540,266,000; 2008-09 Program—$672,597,000; (7) Long-Term Care; (8) recommends adoption. Funds have been included in the budget to cover this increase.

[Pa.B. Doc. No. 11-1704. Filed for public inspection September 30, 2011, 9:00 a.m.]

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