N.J. Admin. Code § 8:85-3.13

Current through Register Vol. 56, No. 11, June 3, 2024

Section 8:85-3.13 - Total adjusted case mix rate

(a) For each rate year, the total adjusted case mix rate for each Class I NF and Class II NF shall be the sum of the direct care rate component, the operating and administrative rate component, the fair rental value allowance, phase-in provisions identified in 8:85-3.16 and the provider tax pass-through per diem.

1. The Department shall compare the Statewide Medicaid day weighted average Class I NF, Class II NF and Class III NF July rate to a target rate calculated from the legislative appropriations for nursing facility Medicaid reimbursement according to (c) below.

2. To the extent that the Medicaid day weighted average comparison rate for all Classes exceeds the target rate, each Class I NF and Class II NF total adjusted case mix rate and Class III NF rate, exclusive of the provider tax pass-through per diem, shall be reduced in accordance with (d) below.

(b) The Department shall determine the Statewide Medicaid day weighted average comparison rate of Class I NF, Class II NF and Class III NF rate as follows:

1. The most recent full State fiscal year NF and SCNF paid claims days available on May 1 prior to the rate year shall be identified and bed hold days shall be included by weighting the days to reflect the percentage of the nursing facility rate paid for bed hold.

2. Each nursing facility's comparison rate identified in (a) above shall be multiplied by the nursing facility's paid claims days and the result shall be divided by the sum of the paid claims days to determine the Statewide Medicaid day weighted average comparison rate.

(c) The Department shall determine the target rate as follows:

1. The total amount of State legislative appropriations for nursing facility Medicaid reimbursement for the rate year July 1 to June 30, excluding the State share of funding for the provider tax pass-through per diems, shall be divided by one minus the Federal Medical Assistance Percentage (FMAP) applicable for the NF rate year to determine the total amount available for nursing facility reimbursement.

i. If more than one FMAP is applicable for the rate year, these FMAPs shall be weighted for the rate year using the number of days each FMAP is effective during the rate year.

ii. If State legislative appropriations change subsequent to the initial calculation of the target rate, these changes shall be used to modify the subsequent quarterly target rate calculations.

iii. If an unanticipated change in the FMAP occurs subsequent to the initial calculation of the target rate, to the extent that FMAP passes on to the nursing facilities, the subsequent quarterly target rate shall be recalculated.

2. The amount calculated in (c)1 above shall be reduced by any legislative appropriation to remove nursing facility payments that are included in the legislative appropriation for NF reimbursement but are paid outside of the NF per diem rates addressed in this chapter.

3. The target rate calculated in (c)1 and 2 above shall be increased for expected resident contributions to Medicaid care provided by the Medicaid NF and SCNF residents and by other payers on their behalf, as follows:

i. The most recent four State fiscal years of Medicaid NF and SCNF paid claims data available on May 1 preceding the rate year for resident contributions shall be identified.

ii. For each year, the total resident contributions shall be totaled and divided by the sum of the Medicaid days to determine a Statewide resident contribution per day.

(1) Simple regression shall be used to trend the Statewide resident contribution per day for each year to the midpoint of the current rate year.

iii. Expected Medicaid days for the rate year shall be calculated from the most recent four years of Medicaid NF and SCNF paid claims data available on May 1 preceding the rate year.

(1) Simple regression shall be used to trend the Statewide Medicaid days to the midpoint of the current rate year.

iv. The trended Statewide resident contribution per day shall be multiplied by the expected Medicaid days for the rate year to determine the Statewide expected resident contributions for the rate year.

4. The combined State funds, Federal funds and Statewide expected resident contributions shall be divided by total expected Medicaid days calculated in (c)3iii above to determine the target rate.

(d) If the Statewide Medicaid day weighted average comparison rate exceeds the target rate, the Department shall make the following adjustments to the calculated rates:

1. The operating and administrative price shall be reduced by as much as is needed to have the Statewide Medicaid day weighted average comparison rate equal to the target rate up to a maximum reduction to 95 percent of the Class I NF median.

2. If the adjustment of the operating and administrative price to 95 percent of the Class I NF median still results in the Statewide Medicaid day weighted average comparison rate exceeding the target rate, the direct care limit shall be reduced by as much as is needed to have the Statewide Medicaid day weighted average comparison rate equal the target rate up to a maximum reduction to 112 percent of the Class I NF median.

3. If the adjustment of the operating and administrative price to 95 percent of the Class I NF median and the reduction of the direct care limit to 112 percent of the Class I NF median still results in the Statewide Medicaid day weighted average comparison rate exceeding the target rate, then a budget adjustment factor shall be calculated by dividing the target rate, exclusive of the Medicaid day weighted average provider tax pass-through per diem, by the Statewide Medicaid day weighted average comparison rate, exclusive of the provider tax pass-through per diem as adjusted for (d)1 and 2 above.

i. The budget adjustment factor determined in (d)3 above shall be multiplied by each nursing facility's rate as adjusted for (d)1 and 2 above and exclusive of the provider tax pass-through per diem.

ii. The adjusted rates as determined in (d)3i above shall be the rates paid during the rate year, as adjusted for changes in the facility average Medicaid case mix index recognized on a quarterly basis, plus the provider tax pass-through per diem.

4. The budget adjustment factor shall be determined annually effective July 1, and shall be utilized in all Class I NF, Class II NF and Class III NF rates during the entire year.

i. If new or improved data becomes available, subsequent to the budget adjustment calculation process and its use in rate setting, this new data shall be utilized in subsequent budget adjustment calculations, but it shall not be utilized to recalculate or otherwise adjust the current rate year budget adjustment factor.

N.J. Admin. Code § 8:85-3.13

As amended, R.1974 d.573, effective 12/16/1984.
See: 16 N.J.R. 2484(a), 16 N.J.R. 3437(a).
Recodified from 10:63-3.12 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).
Recodified from N.J.A.C. 10:63-3.13 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).
In (b), changed N.J.A.C. 10:63 reference to N.J.A.C. 8:85; rewrote (c).
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 "Moveable equipment".