Statutes, codes, and regulations
New Jersey Administrative Code
Title 8 - LAW AND PUBLIC SAFETYChapter 85 - LONG-TERM CARE SERVICES
Subchapter 3 - COST REPORT, RATE CALCULATION AND REPORTING SYSTEM FOR LONG-TERM CARE FACILITIES
Section 8:85-3.10 - Direct care and operating and administrative rate component

N.J. Admin. Code § 8:85-3.10

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Current through Register Vol. 56, No. 11, June 3, 2024
Section 8:85-3.10 - Direct care and operating and administrative rate component
(a) For each cost report identified in 8:85-3.8, the Department shall establish the direct care rate component.
1. A case mix portion percentage shall be established by dividing the cost report's normalized direct care case mix cost per diem established in 8:85-3.9(a)5 by the total normalized direct care per diem established in 8:85-3.9(a)6.
i. A non-case mix portion percentage shall be calculated as 100 percent minus the case mix portion percentage.
2. A facility-specific direct care limit shall be established as follows:
i. Multiply each NF's case mix portion percentage by the direct care limit for the NF's Class designation established pursuant to 8:85-3.9(a) to determine the facility-specific direct care case mix portion of the limit; then
ii. Multiply the result from (a)2i above by the ratio of the cost report period case mix index divided by the Statewide average case mix index to determine the facility-specific direct care case mix portion of the limit adjusted to the cost report period case mix index; then
iii. Multiply each NF's non-case mix portion percentage by the direct care limit for the NF's Class designation to determine the facility-specific direct care non-case mix portion of the limit; then
iv. The results of (a)2ii and iii above shall be totaled to determine the facility-specific direct care limit.
3. For each rate year, the direct care rate component shall be the facility-specific direct care limit or the inflated total direct care cost per diem established in 8:85-3.9(a)3 iii, whichever is less.
4. For each rate quarter, a nursing facility's direct care rate component shall be adjusted for the facility average Medicaid case mix index.
i. If the direct care rate component is the inflated total direct care cost per diem established in 8:85-3.9(a)3 iii, the inflated direct care case mix cost per diem established in 8:85-3.9(a)3 i shall be multiplied by the ratio of the facility average Medicaid case mix index to the cost report period case mix index plus the inflated direct care non-case mix cost per diem established in 8:85-3.9(a)3 ii.
ii. If the direct care rate component is the facility-specific direct care limit established in (a)2iv above, the facility-specific direct care case mix portion of the limit adjusted to the cost report period case mix index according to (a)2ii above shall be multiplied by the ratio of the facility average Medicaid case mix index to the cost report period case mix index average plus the facility-specific direct care non-case mix portion of the limit established in (a)2iii above.
iii. To prevent any aggregate increase or decrease in expected Medicaid program expenditures between July rate setting quarters, for resident roster quarters used in the October, January and April rate quarter, the facility average Medicaid case mix index for use in the quarterly rate adjustments for each NF shall be increased or decreased proportionately, so that the Statewide average Medicaid case mix index equals the Statewide average Medicaid case mix index for the resident roster quarter used in the July rate quarter.
5. Except for a new Class I NF or Class II NF, the following shall apply to each Class I NF and Class II NF not included in the 8:85-3.8 database and to each Class I NF and Class II NF included in this database but where the NF's cost report filing status subjects that NF to penalties pursuant to 8:85-3.2(b):
i. If an NF has had a validated cost report included in the database for rate setting purposes under this chapter, the direct care rate component shall be the lowest direct care rate for the applicable Class of NF for the rate quarter.
(1) The direct care rate in (a)5i above shall remain in effect until such time that a properly filed cost report is received and validated, and a direct care rate established using that validated cost report shall be used to retrospectively adjust the rate quarters in which the lowest direct care rate was used; or
ii. If an NF does not have a validated cost report included in the database for rate setting purposes under this chapter, the rate paid to the NF, including any applicable add-ons, shall be its reimbursement rate in effect on June 30, 2010.
(b) Each NF's operating and administrative rate component shall be the price established for the NF's class designation for the rate year.

N.J. Admin. Code § 8:85-3.10

As amended, R.1984 d.573, effective 12/16/1984.
See: 16 N.J.R. 2484(a), 16 N.J.R. 3437(a).
Deleted (a)8 and recodified (a)9 to (a)8.
Recodified from 10:63-3.9 and amended by R.1994 d.624, effective 1/3/1995.
See: 26 N.J.R. 3614(a), 27 N.J.R. 156(a).
Amended by R.1995 d.174, effective 3/20/1995 (operative April 1, 1995).
See: 27 N.J.R. 281(a), 27 N.J.R. 1307(a).
Amended by R.1996 d.147, effective 3/18/1996.
See: 27 N.J.R. 3314(a), 28 N.J.R. 1535(a).
Recodified from N.J.A.C. 10:63-3.10 and amended by R.2005 d.389, effective 1/17/2006.
See: 36 N.J.R. 4700(a), 37 N.J.R. 1185(a), 38 N.J.R. 674(a).
Substituted "Department" for "departments", changed references N.J.A.C. 10:63 to N.J.A.C. 8:85, and made grammatical changes throughout.
Repeal and New Rule, R.2011 d.121, effective 4/18/2011.
See: 42 N.J.R. 1793(a), 43 N.J.R. 961(c).
Section was "Property--capital costs".