ARTICLE 20 SUBSTITUTE A AS AMENDED
RELATING TO
MEDICAL ASSISTANCE
SECTION 1. Sections 40-8-13.3, 40-8-13.4 and 40-8-29 of the
General Laws in Chapter
40-8 entitled “Medical
Assistance” are hereby amended to read as follows:
40-8-13.3.
Payment for services provided by in state and out of state hospitals.
-- The
department of human services and/or the secretary of executive
office of health and human
services is hereby authorized and directed to amend its rules
and regulations and amend the
Social Security Act in order to provide for payment to
hospitals for services provided to eligible
recipients in accordance with this chapter. Such amended
rules and regulations will continue to
recognize the importance, impact, and cost of the Graduate
Medical Education and training
programs supported by the hospitals in
effective upon the promulgation of the amendments and new
payment methodology pursuant to
this section and section 40-8-13.4, which shall in any
event be no later than March 30, 2010 on
July 1, 2010,
at which time the provisions of sections 40-8-13.2, 27-19-14, 27-19-15 and
27-19-
16 shall be repealed in their entirety.
40-8-13.4. Rate
methodology for payment for in state and out of state hospital
services. -- (a)
The department of human services shall implement a new
methodology for
payment for in state and out of state hospital services in
order to ensure access to and the
provision of high quality and cost-effective hospital care to
its eligible recipients.
(b) In order to improve
efficiency and cost effectiveness, the department of human
services shall:
(1)(A) With
respect to inpatient services: Implement for persons in fee for
service
Medicaid, which is non-managed care, implement a new
payment methodology for inpatient
services utilizing the Diagnosis Related Groups (DRG) method of
payment, which is, a patient
classification method which provides a means of relating payment to
the hospitals to the type of
patients cared for by the hospitals. It is understood that a
payment method based on Diagnosis
Related Groups may include cost outlier payments and
other specific exceptions. The department
will review the DRG payment method and the DRG base price
annually, making adjustments as
appropriate in consideration of such elements as trends in
hospital input costs, patterns in hospital
coding, beneficiary access to care, and the Center for
Medicare and Medicaid Services national
CMS Prospective Payment System (IPPS) Hospital Input
Price index.
(B) With respect to
inpatient services for persons enrolled in Medicaid managed care
plans, it is required effective January 1, 2011, that: (i) Medicaid managed care payment rates to
any hospital, in aggregate on a case mix adjusted basis
(adjusting payment for a beneficiary’s
condition and needs), shall be reduced by 9.9 percent for the
state fiscal year 2011 of that
hospital’s Medicaid payment rates; (ii) Medicaid managed care
payment rates between each
hospital and health plan shall not exceed contracted payment
rates between the hospital and the
health plan that were in effect during calendar year 2009 as
adjusted by the Center for Medicare
and Medicaid Services national CMS Prospective Payment
System (IPPS) Hospital Input Price
index as measured annually and using calendar year 2009 as
a base year. Calculation of each
hospital's aggregate payment rates on a case mix adjusted basis,
shall be based using a single
statewide rate schedule notwithstanding hospital-specific rates
that may be paid on a transitional
basis under fee-for-service Medicaid; (iii) all hospitals
licensed in
payment rates as payment in full; and (iv) for all such
hospitals, compliance with the provisions
of this section shall be a condition of participation in
the
(2) With respect to outpatient
services.: Notwithstanding and
notwithstanding any
provisions of the law to the contrary, for persons enrolled
in fee for service Medicaid, the
department will reimburse hospitals for outpatient services
using a rate methodology determined
by the department and in accordance with federal
regulations. With respect to the outpatient rate,
it is required as of January 1, 2011 that the Medicaid
managed care payment rates between each
hospital and health plan shall not exceed one hundred percent (100%)
of the rate in effect as of
July 1, 2010 for state fiscal
year 2011.
(c) It is intended that
payment utilizing the Diagnosis Related Groups method shall
reward hospitals for providing the most efficient care, and provide
the department the opportunity
to conduct value based purchasing of inpatient care.
(d) The director of the
department of human services and/or the secretary of executive
office of health and human services is hereby authorized to
promulgate such rules and regulations
consistent with this chapter, and to establish fiscal procedures
he or she deems necessary for the
proper implementation and administration of this chapter in
order to provide payment to hospitals
using the Diagnosis Related Group payment methodology.
Furthermore, amendment of the
Social Security Act is hereby authorized to provide
for payment to hospitals for services provided
to eligible recipients in accordance with this chapter.
(e) The department shall
comply with all public notice requirements necessary to
implement these rate changes.
(f) As a
condition of participation in the DRG methodology for payment of hospital
services, every hospital shall submit year-end settlement
reports to the department within one
year from the close of a hospital's fiscal year. Should a
participating hospital fail to timely submit
a year-end settlement report as required by this section,
the department shall withhold financial
cycle payments due by any state agency with respect to this
hospital by not more than ten percent
(10%) until said report is submitted.
(g) The provisions of
this section shall be effective upon implementation of the
amendments and new payment methodology pursuant to this section
and section 40-8-13.3, which
shall in any event be no later than March 30, 2010, at
which time the provisions of §§ 40-8-13.2,
27-19-14, 27-19-15 and 27-19-16 shall be repealed in
their entirety.
(h) The director of
the Department of Human Services shall establish an independent
study commission comprised of representatives of the
hospital network, representatives from the
communities the hospitals serve, state and local policy makers
and any other stakeholders or
consumers interested in improving the access and affordability
of hospital care.
The study commission
shall assist the director in identifying: issues of concern and
priorities in the community hospital system, the delivery of
services and rate structures, including
graduate medical education and training programs; and
opportunities for building sustainable and
effective pubic-private partnerships that support the missions
of the department and the state's
community hospitals.
The director of the
Department of Human Services shall report to the chairpersons of the
House and Senate Finance Committees the findings and
recommendations of the study
commission by December 31, 2010.
40-8-29.
Selective contracting. -- (a) Notwithstanding
any other provision of state law,
the department of human services is authorized to utilize
selective contracting with prior general
assembly approval for the purpose of purchasing for Medicaid
recipients shared living provider
services, durable medical equipment and supplies, non-emergency
transportation, and any other
Medicaid services, when appropriate, in order to
assure that all service expenditures under this
chapter have the maximum benefit of competition, and afford
Rhode Islanders the overall best
value, optimal quality, and the most cost-effective care
possible. Beneficiaries will be limited to
using the services/products of only those providers
determined in a competitive bidding process
to meet the standards for best quality, performance and
price set by the department in accordance
with applicable federal and state laws.
(b) For purposes of
this section "selective contracting" shall mean the process for
choosing providers to serve Medicaid beneficiaries based on
their ability to deliver the best
quality products or services, at the best value or price.
(c) To ensure all
services allowable for Medicare reimbursement for beneficiaries who
are dually eligible, selective contractors must be
willing and able to accept Medicare.
SECTION 2. Section 40-8.3-5 of the General Laws in Chapter
40-8.3 entitled
“Uncompensated Care” is
hereby amended to read as follows:
40-8.3-5.
Hospital payments. -- Due to the high ratio of
unqualified uncompensated
care expenses to qualified uncompensated care expenses,
the department of human services is
hereby authorized and directed to pay during state fiscal
years 2009 and by September 1, 2010
from revenues derived from taxes imposed in accordance
with § 44-17-1: (1) acute care hospitals
in
Hospital, and seven hundred and fifty thousand dollars
($750,000) to The Westerly Hospital; (2)
any acute care hospital in
and (3)
The department of human services is authorized and
directed to pay four million seven hundred
fifty thousand dollars ($4,750,000) during state fiscal
year 2011 to the following hospitals: one
million seven hundred seventy-eight thousand eight hundred
forty-three dollars ($1,778,843) to
dollars ($1,131,929) to
eighty-two dollars ($438,482) to South County
Hospital; two hundred ninety-seven thousand
eight hundred and six dollars ($297,806) to
and six hundred seventy-two dollars ($133,672) to
thousand nine hundred and sixty-four dollars ($170,964) to
fifty-five thousand and nine hundred sixty-three dollars
($155,963) to
Island.
SECTION 3. Section 40-8.5-1.1 of the General Laws in Chapter
40-8.5 entitled “The
Health Care for Elderly and
Disabled Residents Act” is hereby amended to read as follows:
40-8.5-1.1. Managed health care delivery systems. -- (a) To ensure that all medical
assistance beneficiaries, including the elderly and all
individuals with disabilities, have access to
quality and affordable health care, the department of human
services is authorized to implement
mandatory managed care health systems.
(b) "Managed
care" is defined as systems that: integrate an efficient financing
mechanism with quality service delivery; provides a
"medical home" to assure appropriate care
and deter unnecessary services; and place emphasis on preventive
and primary care. For purposes
of Medical Assistance, managed care systems are also
defined to include a primary care case
management model in which ancillary services are provided under
the direction of a physician in
a practice that meets standards established by the
department of human services. Managed care
systems may also include services and supports that optimize
the health and independence of
recipients who are determined to need Medicaid funded long-term
care under chapter 40-8.10
or to be at risk for such care under applicable rules
and regulations promulgated by the department.
Those Any medical assistance recipients who have third-party
medical coverage or insurance may
be provided such services through an entity certified
by or in a contractual arrangement with the
department or, as deemed appropriate, exempt from mandatory managed care in accordance with
rules and regulations promulgated by the department of
human services. The department is
further authorized to redesign benefit packages for medical
assistance beneficiaries subject to
appropriate federal approval.
(c) The In
accordance with § 42-12.4-7, the department is authorized to obtain any
approval through waiver(s), category II or III changes,
and/or state plan amendments, from the
secretary of the
implement mandatory managed health care delivery systems for
all medical assistance recipients,
including the primary case management model in which ancillary
services are provided under the
direction of a physician in a practice that meets standards
established by the department of human
services. The waiver(s), category II or III changes,
and/or state plan amendments shall include the
authorization to exempt extend managed care to cover
long-term care services and supports.
Such authorization shall also include, as deemed
appropriate, exempting certain
beneficiaries
with third-party medical coverage or insurance from mandatory
managed care in accordance with
rules and regulations promulgated by the department of
human services.
(d) To ensure the
delivery of timely and appropriate services to persons who become
eligible for Medicaid by virtue of their eligibility for a
program, the department of human services is authorized to
seek any and all data sharing
agreements or other agreements with the social security
administration as may be necessary to
receive timely and accurate diagnostic data and clinical
assessments. Such information shall be
used exclusively for the purpose of service planning, and
shall be held and exchanged in
accordance with all applicable state and federal medical record
confidentiality laws and
regulations.
SECTION 4. Section 35-17-1 of the General Laws in Chapter
35-17 entitled "Medical
Assistance and Public
Assistance Caseload Estimating Conferences" is hereby amended to read
as follows:
35-17-1.
Purpose and membership. -- (a) In order to provide
for a more stable and
accurate method of financial planning and budgeting, it is
hereby declared the intention of the
legislature that there be a procedure for the determination of
official estimates of anticipated
medical assistance expenditures and public assistance
caseloads, upon which the executive budget
shall be based and for which appropriations by the general
assembly shall be made.
(b) The state budget
officer, the house fiscal advisor, and the senate fiscal advisor shall
meet in regularly scheduled caseload estimating
conferences (C.E.C.). These conferences shall be
open public meetings.
(c) The chairpersonship
of each regularly scheduled C.E.C. will rotate among the state
budget officer, the house fiscal advisor, and the senate
fiscal advisor, hereinafter referred to as
principals. The schedule shall be arranged so that no
chairperson shall preside over two (2)
successive regularly scheduled conferences on the same subject.
(d) Representatives of
all state agencies are to participate in all conferences for which
their input is germane.
(e) The department of
human services shall provide monthly data to the members of the
caseload estimating conference by the fifteenth day of the
following month. Monthly data shall
include, but is not limited to, actual caseloads and
expenditures for the following case assistance
programs: temporary assistance to needy families, SSI federal
program and SSI state program,
general public assistance, child care, state food stamp
program, and weatherization. The report
shall include relevant caseload information and
expenditures for the following medical assistance
categories: hospitals, nursing homes, managed care, special education,
and all other. In the
category of managed care, caseload information and
expenditures for the following populations
shall be separately identified and reported: children with
disabilities, children in foster care, and
children receiving adoption assistance. The information
shall include the number of Medicaid
recipients whose estate may be subject to a recovery, the
anticipated recoveries from the estate
and the total recoveries collected each month.
SECTION 5. Section 40-8.9-9 of the General Laws in Chapter
40-8.9 entitled "Medical
Assistance - Long-Term Care
Service and Finance Reform" is hereby amended to read as
follows:
40-8.9-9.
Long-term care re-balancing system reform goal.--
(a) Notwithstanding any
other provision of state law, the department of human
services is authorized and directed to apply
for and obtain any necessary waiver(s), waiver
amendment(s) and/or state plan amendments from
the secretary of the
rules necessary to adopt an affirmative plan of program
design and implementation that addresses
the goal of allocating a minimum of fifty percent (50%)
of Medicaid long-term care funding for
persons aged sixty-five (65) and over and adults with
disabilities excluding ,in addition to
services for persons with developmental disabilities and
mental disabilities, to home and
community-based care on or before December 31, 2013; provided,
further, the executive office of
health and human services shall report annually as part of
its budget submission, the percentage
distribution between institutional care and home and
community-based care by population and
shall report current and projected waiting lists for
long-term care and home and community-
based care services. The department is further authorized
and directed to prioritize investments in
home and community-based care and to maintain the
integrity and financial viability of all current
long-term care services while pursuing this goal.
(b) The reformed
long-term care system re-balancing goal is person-centered and
encourages individual self-determination, family involvement,
interagency collaboration, and
individual choice through the provision of highly specialized and
individually tailored home-
based services. Additionally, individuals with severe
behavioral, physical, or developmental
disabilities must have the opportunity to live safe and healthful
lives through access to a wide
range of supportive services in an array of community-based
settings, regardless of the
complexity of their medical condition, the severity of their
disability, or the challenges of their
behavior. Delivery of services and supports in less costly and
less restrictive community settings,
will enable children, adolescents and adults to be able to
curtail, delay or avoid lengthy stays in
long-term care institutions, such as behavioral health
residential treatment facilities, long-term
care hospitals, intermediate care facilities and/or skilled
nursing facilities.
(c)
Pursuant to federal authority procured under section 42-7.2-16 of the general
laws,
the department of human services is directed and
authorized to adopt a tiered set of criteria to be
used to determine eligibility for services. Such criteria
shall be developed in collaboration with
the state's health and human services departments and, to
the extent feasible, any consumer
group, advisory board, or other entity designated for such
purposes, and shall encompass
eligibility determinations for long-term care services in nursing
facilities, hospitals, and
intermediate care facilities for the mentally retarded as well as
home and community-based
alternatives, and shall provide a common standard of income
eligibility for both institutional and
home and community-based care. The department is, subject
to prior approval of the general
assembly, authorized to adopt criteria for admission to a
nursing facility, hospital, or
intermediate care facility for the mentally retarded that are more
stringent than those employed
for access to home and community-based services. The
department is also authorized to
promulgate rules that define the frequency of re-assessments for
services provided for under this
section. Legislatively approved levels of care may be applied
in accordance with the following:
(1) The department
shall apply pre-waiver level of care criteria for any Medicaid
recipient eligible for a nursing facility, hospital, or
intermediate care facility for the mentally
retarded as of June 30, 2009, unless the recipient transitions
to home and community based
services because he or she: (a) Improves to a level where
he/she would no longer meet the pre-
waiver level of care criteria; or (b) The individual chooses
home and community based services
over the nursing facility, hospital, or intermediate care
facility for the mentally retarded. For the
purposes of this section, a failed community placement, as
defined in regulations promulgated by
the department, shall be considered a condition of
clinical eligibility for the highest level of care.
The department shall confer with the long-term care
ombudsperson with respect to the
determination of a failed placement under the ombudsperson's
jurisdiction. Should any Medicaid
recipient eligible for a nursing facility, hospital, or
intermediate care facility for the mentally
retarded as of June 30, 2009 receive a determination of a
failed community placement, the
recipient shall have access to the highest level of care;
furthermore, a recipient who has
experienced a failed community placement shall be transitioned
back into his or her former
nursing home, hospital, or intermediate care facility for the
mentally retarded whenever possible.
Additionally, residents shall only be moved from a
nursing home, hospital, or intermediate care
facility for the mentally retarded in a manner consistent with
applicable state and federal laws.
(2) Any Medicaid
recipient eligible for the highest level of care who voluntarily leaves a
nursing home, hospital, or intermediate care facility for the
mentally retarded shall not be subject
to any wait list for home and community based services.
(3) No nursing home,
hospital, or intermediate care facility for the mentally retarded
shall be denied payment for services rendered to a Medicaid
recipient on the grounds that the
recipient does not meet level of care criteria unless and until
the department of human services
has: (i) performed an
individual assessment of the recipient at issue and provided written notice to
the nursing home, hospital, or intermediate care facility
for the mentally retarded that the
recipient does not meet level of care criteria; and (ii) the
recipient has either appealed that level of
care determination and been unsuccessful, or any appeal
period available to the recipient
regarding that level of care determination has expired.
(d) The department of
human services is further authorized and directed to consolidate
all home and community-based services currently provided
pursuant to section 1915(c) of title
XIX of the United States Code into a single system of
home and community-based services that
include options for consumer direction and shared living. The
resulting single home and
community-based services system shall replace and supersede all
section 1915(c) programs when
fully implemented. Notwithstanding the foregoing, the
resulting single program home and
community-based services system shall include the continued funding
of assisted living services
at any assisted living facility financed by the
corporation prior to January 1, 2006, and shall be in accordance
with chapter 66.8 of title 42 of
the general laws as long as assisted living services are
a covered Medicaid benefit.
(e) The department of
human services is authorized to promulgate rules that permit
certain optional services including, but not limited to,
homemaker services, home modifications,
respite, and physical therapy evaluations to be offered
subject to availability of state-appropriated
funding for these purposes.
(f) To promote the
expansion of home and community-based service capacity, the
department of human services is authorized and directed to
pursue rate reform for homemaker,
personal care (home health aide) and adult day care services,
as follows:
(1) A prospective base
adjustment effective, not later than July 1, 2008, across all
departments and programs, of ten percent (10%) of the existing
standard or average rate,
contingent upon a demonstrated increase in the state-funded or
Medicaid caseload by June 30,
2009;
(2) Development, not
later than September 30, 2008, of certification standards
supporting and defining targeted rate increments to encourage
service specialization and
scheduling accommodations including, but not limited to,
medication and pain management,
wound management, certified Alzheimer's Syndrome treatment and
support programs, and shift
differentials for night and week-end services; and
(3) Development and
submission to the governor and the general assembly, not later than
December 31, 2008, of a proposed rate-setting
methodology for home and community-based
services to assure coverage of the base cost of service
delivery as well as reasonable coverage of
changes in cost caused by wage inflation.
(g) The department, in
collaboration with the executive office of human services, shall
implement a long-term care options counseling program to
provide individuals or their
representatives, or both, with long-term care consultations that
shall include, at a minimum,
information about: long-term care options, sources and methods of
both public and private
payment for long-term care services and an assessment of an
individual's functional capabilities
and opportunities for maximizing independence. Each
individual admitted to or seeking
admission to a long-term care facility regardless of the payment
source shall be informed by the
facility of the availability of the long-term care options
counseling program and shall be provided
with long-term care options consultation if they so
request. Each individual who applies for
Medicaid long-term care services shall be provided
with a long-term care consultation.
(h) The department of
human services is also authorized, subject to availability of
appropriation of funding, to pay for certain expenses necessary to
transition residents back to the
community; provided, however, payments shall not exceed an
annual or per person amount.
(i)
To assure the continued financial viability of nursing facilities, the
department of
human services is authorized and directed to develop a
proposal for revisions to section 40-8-19
that reflect the changes in cost and resident acuity that
result from implementation of this re-
balancing goal. Said proposal shall be submitted to the
governor and the general assembly on or
before January 1, 2010.
(j) To ensure persons
with long-term care needs who remain living at home have
adequate resources to deal with housing maintenance and
unanticipated housing related costs, the
department of human services is authorized to develop higher
resource eligibility limits for
persons on home and community waiver services who are living
in their own homes or rental
units.
SECTION 6. Section 40-8-19 of the General Laws in Chapter
40-8 entitled "Medical
Assistance" is hereby
amended to read as follows:
40-8-19. Rates of
payment to nursing facilities. -- (a) Rate reform.
(1) The rates to be
paid by the state to nursing facilities licensed pursuant to chapter 17
of title 23, and certified to participate in the Title
XIX Medicaid program for services rendered to
Medicaid-eligible residents, shall be reasonable and
adequate to meet the costs which must be
incurred by efficiently and economically operated facilities
in accordance with 42 U.S.C. section
1396a(a)(13). The department of human services shall
promulgate or modify the principles of
reimbursement for nursing facilities currently in effect on July 1,
2003 to be consistent with the
provisions of this section and Title XIX, 42 U.S.C. section 1396
et seq., of the Social Security
Act.
(2) The department of
human services shall review the current methodology for
providing Medicaid payments to nursing facilities, including
other long-term care services
providers, and is authorized to modify the principles of
reimbursement to provide for an acuity
based rate adjustment to nursing facilities. The department
of human services is authorized to
implement changes to the payment structure for the purpose of
basing compensation for Medicaid
services to nursing facilities and long term care service
providers for services which shall be
based upon performance, quality, and the scope and the
intensity of the services required by the
provider to meet the Medicaid recipient's level of care needs.
The acuity based rate adjustment
shall take effect on January 15, 2010, provided the
Department of Human Services has held
public hearings and submitted the final implementation plan
to the Chairpersons of the House and
Senate Finance Committees no later than December 1,
2009.
No adjustment, subject
to this section, that is made on the basis of, or in order to
accommodate or address, resident acuity shall be designed or
implemented in such a way as to:
(i)
Decrease the total of Medicaid funding for nursing facility care, although such
methodology may reallocate such funding from one nursing facility
to another;
(ii) Provide
incentives, financial or otherwise, that would disproportionately influence the
nursing facilities that loses funding under the acuity
adjustment to accommodate those losses by
decreasing nursing staff, as opposed to non-nursing staff or
other areas of expense. Such a
prohibited incentive would be created by incorporating
incentives for cost containment only with
regard to nursing labor costs, or disproportionately
disfavoring nursing labor costs.
(iii) Result, by
itself, in any single nursing facility gaining or losing more than two and
two tenths percent (2.2%) of its existing per diem rate
between July 1, 2010 and October 1, 2011.
(3) By no later than October
1, 2011, under the direction of the Secretary of Health and
Human Services, the Department of Human Services shall
modify the principles of
reimbursement to include the acuity needs of patients as a factor
in determining the
reimbursement rates to nursing facilities.
(b) Rate reform. -
Subject to the phase-in provisions in subsections (c) and (d), the
department shall, on or before October 1, 2005, modify the
principles of reimbursement for
nursing facilities to include the following elements:
(1) Annual base years;
(2) Four (4) cost
centers: direct labor, property, other operating, and pass through items;
(3) Re-array of costs
of all facilities in the labor and other operating cost centers every
three (3) years beginning with calendar year 2002;
(4) A ceiling maximum
for allowable costs in the direct labor cost center to be
established by the department between one hundred ten percent
(110%) and one hundred twenty-
five percent (125%) of the median for all facilities for
the most recent array year.
(5) A ceiling maximum
for allowable costs in the other operating cost center to be
established by the department between ninety percent (90%) and
one hundred fifteen percent
(115%) of the median for all facilities for the most
recent array year;
(6) Adjustment of costs
and ceiling maximums by the increase in the National Nursing
Home Price Index ("NNHPI") for the direct
labor cost center and the other operating cost center
for year between array years; such adjustments to be
applied on October 1st of each year
beginning October 1, 2003 for the direct labor cost center and
October 1, 2005 for the other
operating cost center, except for the fiscal year beginning
July 1, 2006 for which the price index
shall be applied on February 1, 2007 and for the fiscal
year beginning October 1, 2007 for which
the adjustment of costs and ceiling maximums shall be one
and one-tenth percent (1.1%). For the
fiscal year beginning July 1, 2008, the price index shall be
applied on April 1, 2009.
(7) Application of a
fair rental value system to be developed by the department for
calculating allowable reimbursement for the property cost center;
(8) Such quality of
care and cost containment incentives as may be established by
departmental regulations.
(9) Notwithstanding the
above provisions, for FY 2009 the department is authorized to
reduce the per diem room and board rate calculated in
accordance with the principles of
reimbursement as described above, paid to the nursing facilities
certified to participate in the Title
XIX Medicaid program for services rendered to
Medicaid-eligible residents by five percent (5%).
This reduction is deemed to be reasonable and adequate
to meet the costs which must be incurred
by efficiently and economically operated facilities in
accordance with 42 U.S.C. section
1396a(a)(13).
(c) Phase I Implementation. - The department shall file a state plan
amendment with the
U.S. Department of Health and Human Services on or
before August 1, 2003 to modify the
principles of reimbursement for nursing facilities, to be
effective on October 1, 2003, or as soon
thereafter as is authorized by an approved state plan amendment,
to establish the direct labor cost
center and the pass through items cost center
utilizing calendar year 2002 cost data, and to apply
the ceiling maximums in subsections (b)(4) and (b)(5).
Nursing facilities whose allowable 2002
direct labor costs are below the median in the direct labor
cost center may make application to the
department for a direct labor cost interim payment adjustment
equal to twenty-five percent (25%)
of the amount such allowable 2002 direct labor costs are
below the median in the direct labor cost
center, provided that the interim payment adjustment granted
by the department on or after
October 1, 2003 must be expended by the facility on
expenses allowable within the direct labor
cost center, and any portion of the interim payment not
expended on allowable direct labor cost
center expenses shall be subject to retroactive adjustment
and recoupment by the department
upon the department's determination of a final direct
labor payment adjustment after review of the
facility's actual direct labor expenditures. The final direct
labor payment adjustment will be
included in the facility's October 1, 2004 rate until the
facility's next base year.
(d) Phase II
Implementation. - The department shall file a state plan amendment with the
U.S. Department of Health and Human Services to modify
the principles of reimbursement for
nursing facilities, to be effective on September 1, 2004, or
as soon thereafter as is authorized by
an approved state plan amendment, to establish a fair
rental value system for calculating
allowable reimbursement for the property cost center in
accordance with subsection (b)(7);
provided, however, that no facility shall receive a payment as
of September 1, 2004 for property-
related expenses pursuant to the fair rental value system
that is less than the property-related
payment they would have received for the other
property-related ("OPR") cost center system in
effect as of June 30, 2004.
SECTION 7. This article shall take effect upon passage.