§ 1187.91. Database.
The Department will set rates for the case-mix payment system based on the following data:
(1) Net operating costs.
(i) The net operating prices will be established based on the following:
(A) Audited nursing facility costs for the 3 most recent years available in the NIS database adjusted for inflation. This database includes audited MA-11 cost reports that are issued by the Department on or before March 31 of each July 1 price setting period.
(B) If a nursing facility that has participated in the MA Program for 3 or more consecutive years has fewer than three audited cost reports in the NIS database that are issued by the Department on or before March 31 of each July 1 price setting period, the Department will use reported costs, as adjusted to conform to Department regulations, for those years not audited within 15 months of the date of acceptance, until audits have been completed and are available in the NIS database for price setting.
(C) If a nursing facility, that has not participated in the MA Program for 3 or more consecutive years, has fewer than three audited cost reports in the NIS database that are issued by the Department on or before March 31 of each July 1 price setting period, the Department will use all available audited cost reports in the NIS database.
(D) For net operating prices effective on or after July 1, 2001, the Department will revise the audited costs specified in clauses (A)—(C) by disregarding audit adjustments disallowing or reclassifying to capital costs, the costs of minor movable property (as defined in § 1187.2 (relating to definitions), effective on July 1, 2001) or linens reported as net operating costs on cost reports for fiscal periods beginning prior to January 1, 2001. The Department will not adjust the audited statistics when revising the nursing facility audited resident care, other resident care and administrative allowable costs to disregard the adjustments relating to minor movable property and linen costs. After revising the audited costs to disregard these adjustments, the Department will recalculate the maximum allowable administrative cost, and will disallow administrative costs in excess of the 12% limitation as specified in § 1187.56(1)(i) (relating to selected administrative cost policies).
(ii) Subparagraph (i)(B) does not apply if a nursing facility is under investigation by the Office of Attorney General. In this situation, the Department will use a maximum of the three most recent available audited cost reports in the NIS database used for price setting.
(iii) A cost report for a period of less than 12 months will not be included in the NIS database used for each price setting year.
(iv) Prior to price setting, cost report information will be indexed forward to the 6th month of the 12-month period for which the prices are set. The index used is the 1st Quarter issue of the CMS Nursing Home Without Capital Market Basket Index.
(v) Total facility and MA CMI averages from the quarterly CMI reports will be used to determine case-mix adjustments for each price-setting and rate-setting period as specified in § 1187.96(a)(1)(i) and (5) (relating to price- and rate-setting computations).
(2) Capital costs.
(i) Fixed property component. The fixed property component of a nursing facility’s capital rate will be based upon the total assigned cost of the nursing facility’s allowable beds.
(ii) Movable property component. The movable property component of a nursing facility’s capital rate will be based upon the audited costs of the nursing facility’s major movable property as set forth in the nursing facility’s most recent audited MA-11 cost report available in the NIS database.
(iii) Real estate tax cost component. The real estate tax component of a nursing facility’s capital rate will be based upon the nursing facility’s actual audited real estate tax costs as set forth in the nursing facility’s most recent audited MA-11 cost report available in the NIS database.
Authority The provisions of this § 1187.91 amended under sections 201(2), 206(2), 403(b) and 443.1(5) of the Public Welfare Code (62 P.S. § § 201(2), 206(2), 403(b) and 443.1(5)).
Source The provisions of this § 1187.91 amended February 8, 2002, effective July 1, 2001, except for the limited extent specified in paragraph (1)(iv)(D) applies to cost reports for fiscal period starting on or after January 1, 2001, 32 Pa.B. 734; amended June 23, 2006, effective July 1, 2006, 36 Pa.B. 3207; amended November 26, 2010, effective November 27, 2010, 40 Pa.B. 6782. Immediately preceding text appears at serial pages (320642) to (320644).
Cross References This section cited in 55 Pa. Code § 1187.96 (relating to price- and rate-setting computations); 55 Pa. Code § 1187.98 (relating to phase-out median determination); and 55 Pa. Code § 1187.107 (relating to limitations on resident care and other resident related cost centers).
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