N.H. Code Admin. R. He-E 806.31

Current through Register No. 25, June 20, 2024

Section He-E 806.31 - Methodology for Determining the Per Diem Rate

(a) A single facility-wide prospective rate shall be paid to each facility and comprised of 5 components of cost determined from nursing facility cost reports submitted to the department.

(b) The 5 components of costs shall be:

(1) Administrative costs incurred in the general management and support of the facility, including the following:

a. Compensation for owners, administrators, and consultants;

b. Management fees;

c. Accounting;

d. Legal;

e. Travel; and

f. Other similar costs;

(2) Other support costs allowable in the support group, except for plant maintenance-related costs, including the following:

a. Housekeeping;

b. Laundry;

c. Dietary;

d. Central supply;

e. Pharmacy;

f. Medical records;

g. Social service; and

h. Recreation;

(3) Plant maintenance costs allowable in the support group related to plant maintenance, including but not limited to:

a. Plant maintenance salaries and benefits;

b. Supplies;

c. Utilities; and

d. Property taxes, as well as other plant maintenance costs;

(4) Capital costs, which are depreciation and interest costs that include, but are not limited to, interest on mortgages and long-term notes and depreciation, of which depreciation and interest costs shall not be inflated; and

(5) Patient care costs shall be those costs incurred in the direct care of residents treated and include but are not limited to:

a. Salaries of RNs, LPNs, and aides;

b. Nursing supplies;

c. Ancillaries, and

d. Therapy services.

(c) Therapy service costs included in (b) (5) d. above shall be subject to a ceiling calculated based on the 85th percentile of the combined physical, occupational, and speech therapy portion of the patient care component of nursing facility rates that were effective October 1, 1998, inflated to August 1, 2006.

(d) For each of the components of cost, inflated costs per diem shall be adjusted by a factor to remove costs incurred by residents with atypical needs calculated as follows:

(1) The atypical factor shall be calculated by multiplying the atypical rate in effect by estimated atypical days to estimated total atypical costs;

(2) The number of atypical days shall be identified by actual paid claims for atypical individual residents in each facility for the year that corresponds with the facility's cost report year;

(3) The atypical payments shall then be divided by total medicaid costs for each facility to develop a ratio of atypical costs to total costs; and

(4) Each cost component per diem shall then be reduced by this ratio to remove the costs of treating an atypical resident.

(e) Resident acuity shall be classified using the minimum data set (MDS) version 3.0 and the 48 group of the RUG-IV, version 1.03 grouper classification system, when calculated by the third party Medicaid vendor, and relative weights assigned as described below:

(1) CMS Staff Time and Resource Intensity Verification (STRIVE) wage weighted staff time nursing minutes shall be combined with New Hampshire nursing costs derived from the facilities' base year cost reports to determine facility-specific direct care nursing costs per day for each classification;

(2) The CMS STRIVE raw national nursing minutes per day for each classification shall be "smoothed" by a ratio of smoothed to unsmoothed mean nursing wage weighted staff time, then multiplied by the New Hampshire nursing wages per minute to yield the average wages per day for each classification;

(3) Total wages per day for each classification shall then be divided by the sum of the nursing wages per day for all classifications to obtain the relative weight;

(4) The assessment types used shall be CMS required MDS assessments, which are the omnibus budget reconciliation act (OBRA) and PPS assessments, including admission, annual, significant change, quarterlies and PPS-only assessments according to the following:

a. The applicable date on the MDS used to determine inclusion shall be the last day of the fifth month prior to the Medicaid rate date;

b. These assessments shall be either an admission assessment with a date of entry (AB1) on or before the picture date depending on the adjustment period or the most recent quarterly, annual, or significant change assessment with an assessment reference date no later than 5 days past the picture date;

c. To insure inclusion in the acuity-based rate, a facility shall transmit all applicable assessments on or before the 20th of the month following the picture date, for inclusion in the data collection process; and

d. Each resident shall then be classified into one of 48 resident classifications using the 48 RUG-IV, version 1.03 grouper classification system, when calculated by the third party Medicaid vendor, and relative weights assigned as described in (6) below;

(5) The 48 RUG-IV classifications shall be described as "State of New Hampshire acuity group classifications;" and

(6) Relative weights for each classification shall then be calculated based on the weighted average relative weight of the 48 RUG-IV classifications and weighted based on the number of residents in each of the 48 RUG-IV classifications.

(f) The facility all-payor case mix index for each facility shall be calculated as follows:

(1) By multiplying the number of residents by the relative weight for each of the 48 classifications; and

(2) Dividing the sum of the values across each resident grouping by the total number of residents.

(g) Costs listed in (b) (1), (2), (3), and (5) above shall be calculated by inflating costs in the base year from the midpoint of the cost report to the midpoint of the rate period using the CMS prospective payment (PPS) skilled nursing facility input price index by expenses category index.

(h) The all-payor case mix index shall be updated to synchronize the all-payor case mix index with the medicaid cost report year.

(i) The prospective per diem rates-component amounts shall be calculated as follows:

(1) A facility-specific prospective per diem rate shall be calculated by summing 5 rate components:

a. Patient care costs;

b. Administrative costs;

c. Other support costs;

d. Plant maintenance; and

e. Capital; and

(2) Each component's per diem amount shall be calculated as follows:

a. The patient care cost component shall be based on:

1. The lower of each facility's case-mix adjusted direct care cost per diem amount; or

2. The statewide median value, as calculated below:

(i) The case mix adjusted direct care cost per diem for each facility shall be calculated by dividing total patient care costs including allowed physical, occupational and speech therapy costs from each facility's cost report by resident days, based on data included in the most recently desk reviewed or field audited cost reports, inflated to the midpoint of the rate year in order to provide equity among providers with cost reports with different year end dates;

(ii) The resulting amount shall then be divided by the all payor case-mix index to determine the case-mix adjusted patient care cost component per diem amount; and

(iii) Facility-specific amounts shall be arrayed, and the statewide median determined;

b. The administrative cost component of the prospective per diem rate shall be based on the statewide median value, as calculated below:

1. Facility-specific cost per diem amounts shall be calculated by dividing the total administrative costs by resident days, based on data included in the most recently desk reviewed or field audited cost reports, inflated to the midpoint of the rate year in order to provide equity among providers with cost reports with different year end dates; and

2. Facility-specific amounts shall be arrayed, and the statewide median value determined;

c. The other support cost component of the prospective per diem rate shall be based on the statewide median value, as calculated below:

1. Facility-specific cost per diem amounts shall be calculated by dividing the total other support costs by resident days, based on data included in the most recently desk reviewed or field audited cost reports, inflated to the midpoint of the rate year, in order to provide equity among providers with cost reports with different year end dates; and

2. Facility-specific amounts shall be arrayed, and the statewide median value determined;

d. The plant maintenance component of the prospective per diem rate shall be based on the statewide median value, as calculated below:

1. Facility-specific cost per diem amounts shall be calculated by dividing the total plant maintenance costs by resident days, based on data included in the most recently desk reviewed or field audited cost reports, inflated to the midpoint of the rate year in order to provide equity among providers with cost reports with different year end dates; and

2. Facility-specific amounts shall be arrayed, and the statewide median value determined;

e. The capital cost component of the prospective per diem rate shall be based on the actual facility cost, taken from the most recently desk reviewed or field audited cost reports, subject to an aggregate 85th percentile ceiling; and

f. Administrative, other support, and plant maintenance cost components shall be reimbursed at the statewide median value, based on data included in the most recently desk reviewed or field audited cost reports.

(j) In addition to the requirements in (g) (2) a above, DHHS shall conduct a review of acuity-based rates at least every 6 months, using the most recently available MDS data submitted by the facilities after review validation.

(k) Facility-specific per diem rates shall be calculated as follows:

(1) The per diem cost components shall be summed to obtain the total facility rate per diem for each resident in the nursing facility as of a date specified by the department;

(2) The resulting rate shall be paid to the nursing facility until rates are updated with new MDS data upon rebasing, at which time the rates for all residents are summed and divided by the total number of residents in the facility; and

(3) These rates shall be reduced by a budget adjustment factor equal to 26.82% in accordance with the Medicaid State Plan.

(l) Rates shall be limited in accordance with the following requirements stipulated below:

(1) In no case shall payment exceed the provider's customary charges to the general public for such services or the Medicare upper limit of reimbursement; and

(2) Payment shall be made at the lesser rate when an established rate is a condition to a certificate of need approval and that rate differs from the Medicaid rate established by the department.

(m) When a rate limitation is applied as a condition of the certificate of need, a provider may, if aggrieved, appeal such limitation.

(n) Acuity-based rates shall be reviewed every 6 months for possible adjustment for acuity, using the most recently reviewed and validated MDS data submitted by the facilities.

(o) An acuity adjustment shall occur at least every 6 months.

(p) The department shall review rates, and rebase nursing facility rates at least every 5 years subject to the limitations given below:

(1) Only when rates are rebased shall costs be inflated;

(2) Costs shall be inflated to the midpoint of the rate year, using the CMS prospective payment system (PPS) skilled nursing facility input price index by expenses category index; and

(3) The resulting rate shall be reduced by a budget adjustment factor equal to 26.82% in accordance with the Medicaid State Plan.

N.H. Code Admin. R. He-E 806.31

#8547, eff 1-24-06 (formerly He-W 593.04 ); ss by #8769, EMERGENCY RULE, eff 12-1-06, EXPIRES: 5-30-07; ss by #8890, eff 5-25-07; ss by #9623, eff 12-24-09

Amended by Volume XXXVIII Number 02, Filed January 11, 2018, Proposed by #12440, Effective 12/23/2017, Expires 6/21/2018.

Amended by Volume XXXVIII Number 28, Filed July 12, 2018, Proposed by #12566, Effective 6/29/2018, Expires 6/29/2028.

Amended by Volume XXXVII Number 28, Filed July 13, 2017, Proposed by #12220, Effective 7/1/2017, 7/1/2027.