Section 1200-13-02-.01 - DEFINITIONSThe following definitions apply to nursing facility (NF) provider reimbursement. Additional definitions are contained in Chapter 1200-13-01.
(1) Acceptable Cost Report- The skilled nursing facility (SNF) cost report (Medicare form 254010), or hospital health care complex cost report (Medicare form 2552-10), Medicaid supplemental cost report form, and required additional information. To be acceptable, the appropriate forms and required additional information must be filed with the Comptroller by the required due date, and meet the acceptance criteria on the acceptance check list. The Medicaid supplemental cost report form and acceptance check list are available on TennCare's main website under the LTSS subsection.(2) Active MDS Assessment- A resident's MDS assessment is considered active when it has been accepted by CMS. The assessment will remain active until a subsequent MDS assessment for the same resident is received by CMS, or the assessment becomes a Delinquent MDS Resident Assessment.(3) Administrative and Operating Cost Component - The portion of the Medicaid daily NF rate that is attributable to the general administration and operation of the NF. These costs include the allowable and reimbursable SNF/NF costs that are not included in the Direct Care Case Mix Adjusted, Direct Care Non-Case Mix Adjusted, Capital, Cost-Based, or Excluded cost components.(4) Annualized Medicaid Resident Day-Weighted Median Cost - A numerical value determined by arraying the per diem costs and total annualized Medicaid resident days of each NF provider from low to high and identifying the point in the array at which the cumulative total of all annualized Medicaid resident days first equals or exceeds half the number of the total annual Medicaid resident days for all Medicaid participating NF providers. The per diem cost at this point is the annualized Medicaid resident day-weighted median cost.(5) Appraisal Value- The most current depreciated NF appraised value as determined by the certified appraisal firm designated by TennCare. TennCare's certified appraisal contractor must be selected through a formal procurement process for a single statewide contract.(6) Capital Cost Component- The portion of the NF rate that is designed to compensate providers for their capital costs. These cost centers include the SNF/NF portion of: 1) Capital Related Costs- Building and Fixtures cost center (and applicable subscripted cost centers); 2) The Capital Related Costs - Moveable Equipment (and applicable subscripted cost centers); and3) Other Capital Related Costs (and applicable subscripted cost centers). If real estate tax cost related to the SNF/NF is reported in one of these cost centers, then real estate tax cost will be excluded from the capital cost component, and included in the costbased component.(7) Case Mix- A measure of the intensity of care a resident required, as documented on the MDS and measured using the RUG-IV 48 Grouper resident classification system. CMS nursing-only RUG weights will be utilized.(8) Comptroller- The Tennessee Office of the Comptroller of the Treasury, or its successor, and the associated work product of its contractors and agents.(9) CMS- The Centers for Medicare and Medicaid Services.(10) Cost-Based Component- The portion of the per diem rate attributable to real estate taxes related to NF services, and NF provider assessment costs.(11) Delinquent MDS Resident Assessment- An MDS assessment that is more than 113 days old as of the end date of the MDS assessment collection period for each semi-annual rate period, as measured from the Assessment Reference Date (ARD) field on the MDS.(12) Direct Care Case Mix Adjusted Cost Component - The portion of the Medicaid daily NF rate that is attributable to salaries, contract labor, and direct/apportioned payroll tax and employee benefit expense for registered nurses (RN), licensed practical/vocational nurses (LPN/LVN), and certified nurse aides (CNA) or orderlies that are providing direct SNF/NF patient care services. Costs associated with SNF/NF administrative nursing functions (Director of Nursing (DON), Assistant Director of Nursing (ADON), Minimum Data Set (MDS) coordinator, Quality Assurance (QA) coordinator, In-service/training coordinator) are not included in this cost component. Direct care case mix adjusted cost also includes a proportionate allocation of pooled payroll taxes and employee benefits expenses. Pooled payroll taxes and employee benefits will be apportioned to this cost component using Medicare cost report cost apportionment mechanics. All cost component costs are subject to the methods of apportionment in the Medicare cost report. Any portion of cost component expenses that are allocated to non-reimbursable cost centers or non-nursing facility (SNF/NF) cost centers, as designated by TennCare, will be excluded from cost component totals.(13) Direct Care Non-Case Mix Adjusted Cost Component - The portion of the Medicaid daily NF rate that is attributable to salaries, contract labor, and direct/apportioned payroll tax and employee benefit expense associated with NF DON and ADON duties, the cost of raw food and special dietary supplements reported on the Medicaid supplemental cost report (includes those dietary supplements used for tube feeding or oral feeding, such as elemental high nitrogen diet, even when prescribed by a physician as defined by CMS Publication 15-1, The Provider Reimbursement Manual - Part I, section 2203.1), and staff associated with the provision of social services and recreational activities to NF residents. Direct care non-case mix adjusted cost also includes a proportionate allocation of pooled payroll taxes and employee benefits expenses. Pooled payroll taxes and employee benefits will be apportioned to this cost component using Medicare cost report cost apportionment mechanics. All cost component costs are subject to the methods of apportionment in the Medicare cost report. Any portion of cost component costs that are allocated to non-reimbursable cost centers or non-nursing facility (SNF/NF) cost centers, as designated by TennCare, will be excluded from cost component totals.(14) Excluded Cost Component- The portion of NF provider expense that will be excluded from allowable cost and not included in rate determination: (a) The Nursing and Allied Health cost center (and applicable subscripted cost centers).(b) The Interns and Residents cost centers (and applicable subscripted cost centers).(c) The ParaMed Program cost center (and applicable subscripted cost centers).(d) The direct costs of all non-overhead (general services) and non-routine SNF/NF cost centers.(e) Overhead (general service) cost center expense allocations to non-SNF/NF routine cost centers, outpatient cost centers, and non-reimbursable cost centers, as determined by TennCare.(f) For hospital-based NF overhead (general services), cost allocations to cost centers other than the SNF/NF routine cost centers, are excluded from rate setting allowable costs.(15) Fair Rental Value (FRV)- The methodology used to calculate the capital reimbursement per diem rate for Medicaid participating NF.(16) Final Case Mix Index Report (FCIR)- A semi-annual report reflecting the Medicaid and facility-wide case mix index for each NF using the time-weighted acuity measurement system, and end of therapy dates.(17) Fixed Assets- Buildings and building equipment, as described by CMS Publication 15-1, The Provider Reimbursement Manual- Part 1, sections 104.2 and 104.3.(18) Index Factor- The most recently published Skilled Nursing Facility without Capital Market Basket Index, as produced for subscribers by IHS Global Insight (IHS Economics), or a comparable index, if this index ceases to be produced.(19) Major Movable Equipment- Capitalized assets as defined by CMS Publication 15-1, The Provider Reimbursement Manual - Part 1, section 104.4.(20) Medicare Cost Report- CMS Forms 2540-10 and 2552-10, or subsequent versions of these forms.(21) Medicaid Supplemental Cost Report- The supplemental cost reporting schedules designated by TennCare. The Medicaid supplemental cost report form is available on TennCare's main website under the LTSS subsection.(22) Medicaid Nursing Facility-Wide Semi-Annual Average Case Mix Index- The calendar day weighted average, carried to four (4) decimal places, of all indices for each resident MDS assessment transmitted and accepted by CMS that is considered active within a given semiannual rate period and where Medicaid is determined to be the primary per diem payer source. The resident case mix indices are calculated utilizing the time-weighted acuity measurement system. Any MDS assessments or MDS assessment periods which coincide with a federally or state declared public health emergency period may be excluded from or have BC1-Delinquent records removed from the calculation of the Medicaid Nursing FacilityWide Semi-Annual Average Case Mix Index. In the event that less than three (3) months of MDS assessment information is available for the semi-annual case mix index calculation after exclusion, the most recently preceding Medicaid Nursing Facility-Wide Semi-Annual Average Case Mix Index which contains three (3) or more months of MDS assessment information will be utilized for rate setting.(23) Minimum Data Set (MDS)- A core set of screening and assessment data, including common definitions and coding categories that form the foundation of the comprehensive assessment for all residents of long-term care NF providers certified to participate in the Medicaid program. The Tennessee reimbursement system will employ the current MDS assessment as approved by CMS.(24) Neutralized- The process of removing cost variations associated with case mix. Neutralized cost is determined by dividing a provider's inflated per diem direct care case mix adjusted costs by its cost report period average case mix index (CMI).(25) New Nursing Facility Provider- A provider whose licensed beds have not previously been certified for participation by the Medicaid program for NF level of care.(26) Nursing Facility Cost Report Period Case Mix Index - The calendar day weighted average of all applicable NF-wide semi-annual average case mix indices, carried to four (4) decimal places. The case mix index periods used in this weighted average will be the periods that most closely coincide with the NF provider's cost reporting period that is used for rate setting. The average will be determined by weighting the applicable semi-annual case mix index periods by the number of days the MDS assessments were active during the cost reporting period. The semi-annual rate period case mix index averages will be calculated using the time-weighted acuity measurement system, and be inclusive of MDS assessments available as of the date of the applicable FCIRs. Any MDS assessments, BC1-Delinquent records, or MDS assessment periods excluded from the semi-annual rate setting process will also be excluded from the calculation of the Nursing Facility Cost Report Period Case Mix Index. For example, a NF provider with a 1/1/2018 to 12/31/2018 cost reporting period would have a nursing facility cost report period case mix index calculated by the following: ((7/1/2018- 12/31/2018 Rate Period CMI * 59 days)+ (1/1/2019- 6/30/2019 Rate Period CMI * 184 days)+ (7/1/2019- 12/31/2019 Rate Period CMI * 122 days))/ 365 days, rounded to 4 decimals.
Portion of CostReport Year | CMIPeriod | Rate Period Utilizing CMI | Days for WeightedCalculation |
1/1/2018 through2/28/2018 | 9/1/2017 through2/28/2018 | 7/1/2018 through12/31/2018 | 59 |
3/1/2018 through8/31/2018 | 3/1/2018 through8/31/2018 | 1/1/2019 through6/30/2019 | 184 |
9/1/2018 through12/31/2018 | 9/1/2018 through2/28/2019 | 7/1/2019 through12/31/2019 | 122 |
(27) Nursing Facility-Wide Semi-Annual Average Case Mix Index - The calendar day weighted average, carried to four (4) decimal places, of all indices for all resident MDS assessments transmitted and accepted by CMS that are considered active within a given semi-annual rate period. The resident case mix indices are calculated utilizing the time-weighted acuity measurement system. Any MDS assessments or MDS assessment periods which coincide with a federally or state declared public health emergency period may be excluded from or have BC1-Delinquent records removed from the calculation of the Nursing Facility-Wide Semi-Annual Average Case Mix Index. In the event that less than three (3) months of MDS assessment information is available for the semi-annual case mix index calculation after exclusion, the most recently preceding Nursing Facility-Wide Semi-Annual Average Case Mix Index which contains three (3) or more months of MDS assessment information will be utilized for rate setting.(28) Preliminary Case Mix Index Report (PCIR) - The preliminary report that reflects the acuity of the residents in the NF. Resident acuity will be measured for each semi-annual rate period, utilizing the time-weighted acuity measurement system.(29) Quality Informed- A descriptor of any component of the NF reimbursement methodology that is adjusted based on the NF provider's Quality Tier (e.g., Direct Care Case Mix Adjusted Cost Component and Direct Care Non-Case Mix Adjusted Cost Component) or other specified performance measures (e.g., Fair Rental Value).(30) Quality Tier- The NF provider's classification within a specified range of scores on quality outcome measures.(31) Rate Year- A one-year period from July 1 through June 30 during which a particular set of rates are in effect, corresponding to a state fiscal year.(32) Rebase- The process of reestablishing cost component medians and reimbursement rates by incorporating the most recently audited or reviewed qualifying cost reports.(33) Resource Utilization Group-IV (RUG-IV) Resident Classification System- The resource utilization group used to classify residents. When a resident classifies into more than one RUG-IV group, or RUG-IV successor group, the RUG with the greatest CMI will be utilized to calculate the NF provider's all residents average CMI and Medicaid residents average CMI. The nursing-only weights RUG-IV Version 1.03 Grouper, or its successor, will be utilized for rate determination purposes.(34) Sales Comparison Approach- Based upon the principle of substitution, when a property is replaceable in the market its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming no costly delay in making the substitution. Since two (2) properties are rarely identical, the necessary adjustments for differences in quality, location, size, services, and market appeal are a function of appraisal experience and judgment. Land is valued via the sales comparison approach.(35) Semi-Annual Rate Period- A six (6) month period beginning July 1 or January 1 for which new reimbursement rates will be calculated. The semi-annual rate period will use all active MDS assessments for the time period beginning ten (10) months prior and ending four (4) months prior to the begin date of the semi-annual rate period. Any active MDS assessments or active MDS assessment periods which coincide with a federally or state declared public health emergency period may be excluded from or have BC1-Delinquent records removed from the calculation of the applicable case mix index averages. In the event that less than three (3) months of active MDS assessment information is available for use in the semiannual rate period calculation after exclusion, the most recently preceding applicable case mix index averages which contain three (3) or more months of MDS assessment information will be utilized for rate setting. For example, the July 1, 2018, semi-annual rate period will use active MDS assessment records from September 1, 2017, through February 28, 2018.
(36) TennCare - The program administered by the Single State Agency as designated by the State and CMS pursuant to Title XIX of the Social Security Act and the Section 1115 Research and Demonstration Waiver granted to the State of Tennessee; the name of the Division within the Tennessee Department of Finance and Administration encompassing all the health care related agencies located within F and, the name of the Bureau which directly administers the program.(37) Time-Weighted Acuity Measurement System (TW) - The case mix index calculation methodology that is compiled from the collection of all resident MDS assessments transmitted and accepted by CMS that are considered active within a given semi-annual rate period. The resident MDS assessments will be weighted based on the number of calendar days that the assessment is considered an active assessment within a given semi-annual rate period.(38) Weighted Construction Year Age- The construction age is determined by subtracting the year the building or building addition was constructed as denoted in the appraisal report from the year the appraisal was performed by TennCare's certified appraisal firm. The average of the construction year is weighted by the finished square footage associated with each separate building or addition as denoted in the appraisal report produced by TennCare's certified appraisal firm.Tenn. Comp. R. & Regs. 1200-13-02-.01
Original rule filed January 18, 1979; effective March 5, 1979. Amendment filed March 8, 1983; effective April 7, 1983. Amendment filed June 23, 1983; effective July 25, 1983. Amendment filed March 8, 1984; effective June 12, 1984. Amendment filed June 2, 1988; effective July 17, 1988. Repeal filed May 5, 2009; effective July 19, 2009. New rules filed May 1, 2018; effective July 30, 2018. Amendments filed January 28, 2021; effective 4/28/2021.Authority: T.C.A. §§ 4-5-202, 14-23-105, 14-23-109, 71-5-105, 71-5-109, and 71-5-1413.