Current through Register Vol. 54, No. 24, June 15, 2024
Section 1181.66 - Setting ceilings on allowable net operating costs(a) The Department will establish maximum group per diem rate ceilings for allowable net operating costs for each level of care for general and county operated nursing facilities. Effective April 1, 1988, these ceilings will be based on 115% of the median of year-end reported costs excluding depreciation and interest. Facilities will not be reimbursed for net operating costs above the maximum group per diem rate ceilings. Costs which are not reimbursed within the established ceilings for a fiscal year may not be carried forward or backward to other fiscal years. The ceilings for general and county operated nursing facilities will be established as follows: (1) The Department will use only year-end cost reports that cover a period of at least 180 days, are acceptable and received at least 90 days prior to the implementation date of the new ceilings. An acceptable cost report is one in which the following requirements are met: (i) Applicable items are fully completed in accordance with the instructions incorporated in the Department's cost report, including the necessary original signatures on the required number of copies.(ii) Computations carried out on the form are accurate and consistent with other related computations.(iii) The treatment of costs conforms to the applicable requirements of this subchapter and Subchapters B and C (relating to manual for allowable cost reimbursement for skilled nursing and intermediate care facilities; and Reserved).(iv) Required documentation is included.(2) In establishing net operating ceilings, the data from the provider's latest acceptable cost report will be brought forward to a common date by using multipliers developed by the Department based on the most current revised urban wage earners and clerical workers consumer price index (CPI-W, 1967 = 100, all items, all cities, United States average). This factor will adjust for inflation for the period from the end-date of each cost report to the common date.(3) To account for the period from the common date to the end date for which these ceilings will be in effect, the Department will again utilize a combination of inflation factors. If actual inflation factors are available, CPI-W will be utilized. If actual CPI-W is not available, the Department will take into account projected economic indicators, such as CPI-W. During Fiscal Years 1992-1993, 1993-1994 and 1994-1995, the Department will utilize CPI-W plus an amount equal to the difference between CPI-W and the DRI McGraw-Hill Health Care Costs-Nursing Home Market Basket applied to the full year ceiling setting period applicable to the last day of the second quarter of the calendar year, as the inflation factor under this paragraph. The Department will also increase the ceilings so calculated by an additional factor equal to 2.5%.(4) The inflation factors used, the common date and the number of cost reports by facility year utilized will be published in the notice in the Pennsylvania Bulletin which establishes each new ceiling.(5) Metropolitan Statistical Area (MSA) group ceilings for allowable net operating costs for county nursing facilities and general nursing facilities, excluding hospital-based and special rehabilitation facilities, will be established at least annually by the Department. Effective April 1, 1988, these ceilings will be based on 115% of the median of year-end reported costs excluding depreciation and interest. The groups used by the Department will be based on the classification levels announced by the Federal Office of Management and Budget no later than 90 days before the implementation date of the new ceilings. The Department will establish a separate ceiling for general nursing facilities, excluding hospital-based and special rehabilitation facilities, in counties which are located in Level A statistical areas, for those in Level B statistical areas, for those in Level C statistical areas and for those in nonstatistical areas under the Federal system. The Department will establish a separate ceiling for county nursing facilities in counties located in either Level A or Level B statistical areas and one for county nursing facilities in counties located in either Level C statistical areas or in nonstatistical areas under the Federal system.(6) The Department will announce, by notice submitted for recommended publication in the Pennsylvania Bulletin and suggested codification in the Pennsylvania Code as an appendix to this section, the classification levels and the applicable per diem ceilings for the location of the facility, level of care, type of facility and date of service involved. A fiscal note, as required by section 612 of The Administrative Code of 1929 (71 P. S. § 232), will accompany the notice.(b) Statewide ceilings for allowable net operating costs will be established at least annually by the Department under the method in subsection (a)(1)-(4) and (6) for hospital-based nursing facilities. Effective April 1, 1988, these ceilings will be based on 115% of the median of year-end reported costs excluding depreciation and interest.(c) Statewide ceilings for allowable net operating costs will be established at least annually by the Department under the method in subsection (a)(1)-(4) and (6) for special rehabilitation facilities. Effective April 1, 1988, these ceilings will be based on 115% of the median of year-end reported costs excluding depreciation and interest.(d) State-operated intermediate care facilities for the mentally retarded are reimbursed actual allowable costs under Medicare principles, subject to MA regulations. NonState-operated intermediate care facilities for the mentally retarded are reimbursed actual, allowable, reasonable costs under Subchapter C and other applicable MA Regulations.(e) Psychiatric transitional facilities are reimbursed actual allowable costs under Medicare principles and within the limits of their budgets.The provisions of this § 1181.66 codified July 24, 1981, effective 7/25/1981, 11 Pa.B. 2610; amended July 2, 1982, effective 7/1/1982, 12 Pa.B. 2070; amended May 3, 1985, effective retroactively to July 1, 1984, 15 Pa.B. 1629; amended September 6, 1985, effective 9/7/1985, except that the groups and ceilings shall be effective and apply at audit to costs of services rendered from July 1, 1984 through December 31, 1985, 15 Pa.B. 3181; corrected January 24, 1986, effective 9/7/1985, 16 Pa.B. 249; amended September 5, 1986, effective 7/1/1985, 16 Pa.B. 3294; amended June 29, 1990, effective immediately and apply retroactively to April 1, 1988, 20 Pa.B. 3593; amended July 21, 1995, effective immediately and apply retroactively to July 1, 1992, and sunsetted on June 30, 1995, 25 Pa.B. 2893.See 22 Pa.B. 3749 (July 18, 1992) for nursing home pooling provisions.
The provisions of this § 1181.66 amended under sections 201, 403 and 443.1(2) and (3) of the Public Welfare Code (62 P. S. §§ 201, 403 and 443.1 (2) and (3)).
This section cited in 55 Pa. Code § 1181.45 (relating to ongoing responsibilities of providers); 55 Pa. Code § 1181.51 (relating to general payment policy); 55 Pa. Code § 1181.52 (relating to payment conditions); 55 Pa. Code § 1181.73 (relating to final reporting); 55 Pa. Code § 1181.74 (relating to auditing requirements related to cost reports); and 55 Pa. Code § 1181.217 (relating to establishing ceilings for allowable net operating costs).