§ 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 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) 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.
(ii) The three components of the capital portion of the case-mix rate are determined as follows:
(A) Fixed property component. The fixed property component will be determined in accordance with § 1187.96(d)(1).
(B) Movable property component. The movable property component will be determined as follows:
(I) The nursing facility’s acquisition cost, as determined in accordance with § 1187.61(b) (relating to movable property cost policies), for any new items of movable property acquired on or before the date of enrollment in the MA program, will be added to the nursing facility’s remaining book value for any used movable property as of the date of enrollment in the MA program to arrive at the nursing facility’s movable property cost.
(II) The nursing facility’s movable property cost will then be amortized equally over the first 3 rate years that the nursing facility is enrolled in the MA program to determine the nursing facility’s movable property component of the capital rate.
(III) After the first 3 rate years the nursing facility’s movable property component will be based on the most recent audited MA-11 cost report available in the NIS database. If no MA-11 is available in the NIS database, the nursing facility will not receive the movable property component of the capital rate.
(C) Real estate tax component.
(I) For the first 3 rate years, the new nursing facility real estate tax component will be the nursing facility’s annual real estate tax cost as of the date of enrollment in the MA program.
(II) After the first 3 rate years, the real estate tax component will be based on the audited MA-11 cost report available in the NIS database. If no audited MA-11 cost report is available in the NIS database, the nursing facility will not receive the real estate tax component of the capital rate.
(iii) Newly constructed nursing facilities are exempt from the adjustment to 90% occupancy until the nursing facility has participated in the MA Program for one full annual price setting period as described in § 1187.95 (relating to general principles for rate and price setting).
(iv) A new nursing facility is exempt from the occupancy requirements in § 1187.104(1)(ii) (relating to limitations on payment for reserved beds) until a CMI Report for each of the three picture dates used to calculate overall occupancy as set forth in § 1187.104(1)(iii) is available for the rate quarter.
(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.
(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.
(3) Former prospective payment nursing facilities. A nursing facility that received a prospective rate prior to the implementation of the case-mix payment system will be treated as a new nursing facility under paragraph (1) for the purpose of establishing a per deim rate.
Authority The provisions of this § 1187.97 amended under 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).
Source The provisions of this § 1187.97 amended February 8, 2002, effective July 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; amended August 26, 2011, effective retroactive to July 1, 2010, 41 Pa.B. 4630; corrected February 3, 2012, effective February 5, 2011, 42 Pa.B. 673; amended July 18, 2014, effective July 19, 2014, 44 Pa.B. 4498. Immediately preceding text appears at serial pages (360207) to (360209).
Cross References This section cited in 55 Pa. Code § 1187.96 (relating to price- and rate-setting computations).
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