Section 405 IAC 1-14.7-12 - Rate reductions and settlementsAuthority: IC 12-15-1-10; IC 12-15-21-3
Affected: IC 4-21.5-3; IC 12-13-7-3; IC 12-15
Sec. 12.
(a) Rate reductions and corrective remedies shall be assessed on a per nursing facility basis.(b) Reimbursement lost because of an imposed rate reduction or corrective remedy cannot be recovered by the provider.(c) Rate reductions and corrective remedies may be addressed through a prospective rate calculation, retroactive reprocessing of claims, or settlement process.(d) Beginning April 1, 2024, the following events shall result in a reduction of the Medicaid per diem rate: | (1) | Event | Event Due Date | Rate Reduction Amount |
| Cost Report Submission for Annual Rebase | 15 to 45 calendar days after the end of the fifth month after the fiscal period | 2% of the per diem rate in effect as of the event date |
| 46 or more calendar days after the end of the fifth month after the fiscal period | 10% of the per diem rate in effect as of the event date |
| (2) | Event | Event Due Date | Rate Reduction Amount |
| Cost Report Submission Following a Change in Ownership | 1 to 30 calendar days after the due date identified on the Change of Ownership Letter | 1% of the per diem rate in effect as of the event date |
| 31 or more calendar days after the due date identified on the Change of Ownership Letter | 5% of the per diem rate in effect as of the event date |
| (3) | Event | Event Due Date | Rate Reduction Amount |
| Prefield Information Request | 1 to 30 calendar days after the due date identified on the Audit Notification Letter | 2% of the per diem rate in effect as of the event date |
| 31 or more calendar days after the due date identified on the Audit Notification Letter | 10% of the per diem rate in effect as of the event date |
| (4) | Event | Event Due Date | Rate Reduction Amount |
| Field Work - Follow-Up Letter (exception noted in subsection (e)) | 1 to 30 calendar days after the due date identified on the Follow-Up Letter | 1% of the per diem rate in effect as of the event date |
| 31 or more calendar days after the due date identified on the Follow-Up Letter | 5% of the per diem rate in effect as of the event date |
| (5) | Event | Event Due Date | Rate Reduction Amount |
| Change in Ownership Checklist Submission | 1 to 30 calendar days from checklist request | 1% of the per diem rate in effect as of the event date |
| 31 or more calendar days from checklist request | 5% of the per diem rate in effect as of the event date |
(6) The rate reduction for events in subdivisions (1), (2), and (3) shall begin January 1 of the subsequent year and end July 1 of the subsequent year. If a complete cost report or prefield information is not submitted by September 30 after the fiscal period, a review shall not be performed on the delinquent information nor shall the cost report be used to calculate biannual rates.(7) The rate reduction for the event in subdivision (4) shall begin on the date described in the table in subdivision (8) and remain in effect until the biannual period after the effective date of the rate reduction. Information received forty-five (45) or more days after the event due date may not be accepted, and applicable adjustments shall be made. The rate reduction shall be effective for at least one (1) biannual period.(8) Rate Reduction Beginning Date: | Event Due Date | Effective Date of Rate Reduction |
| January 1 - April 30 (Year 1) | July 1 (Year 1) |
| May 1 - October 31 (Year 1) | January 1 (Year 2) |
| November 1 - December 31 (Year 1) | July 1 (Year 2) |
(9) The rate reduction for the event in subdivision (5) shall begin and end as described in the table in subdivision (10). The rate reduction shall continue until a completed checklist is submitted.(10) Change of Ownership Checklist Rate Reduction: | Month Change of Ownership Checklist is Delinquent | Rate Reduction Beginning Date | Month Delinquent Checklist is Submitted | Rate Reduction End Date |
| January (Year 1) | July 1 (Year 1) | February (Year 1) | December 31 (Year 1) |
| February (Year 1) | July 1 (Year 1) | March (Year 1) | December 31 (Year 1) |
| March (Year 1) | July 1 (Year 1) | April (Year 1) | December 31 (Year 1) |
| April (Year 1) | July 1 (Year 1) | May (Year 1) | December 31 (Year 1) |
| May (Year 1) | January 1 (Year 2) | June (Year 1) | June 30 (Year 2) |
| June (Year 1) | January 1 (Year 2) | July (Year 1) | June 30 (Year 2) |
| July (Year 1) | January 1 (Year 2) | August (Year 1) | June 30 (Year 2) |
| August (Year 1) | January 1 (Year 2) | September (Year 1) | June 30 (Year 2) |
| September (Year 1) | January 1 (Year 2) | October (Year 1) | June 30 (Year 2) |
| October (Year 1) | January 1 (Year 2) | November (Year 1) | June 30 (Year 2) |
| November (Year 1) | July 1 (Year 2) | December (Year 1) | December 31 (Year 2) |
| December (Year 1) | July 1 (Year 2) | January (Year 2) | December 31 (Year 2) |
(e) If a nursing facility cannot locate requested information in the field work - follow-up letter under subsection (d)(4), they shall supply a signed declaration, prescribed by the office, that they are unable to produce the requested documentation. This declaration shall be submitted at least one (1) day before the due date on the field work - follow-up letter to avoid the rate reduction.(f) Until March 31, 2024, a rate reduction shall be assessed as follows:(1) Failure to submit a complete cost report as described in section 3 of this rule in the period required shall result in the following actions: (A) When a complete cost report is more than one (1) calendar month past due, the following shall apply: (i) The rate in effect immediately preceding the due date shall be reduced by ten percent (10%), effective the first day of the seventh month after the provider's fiscal year end.(ii) The reduced rate shall remain in effect until the first day of the month after the delinquent complete cost report is received by the office.(iii) Rate adjustments shall not be allowed until the first day of the calendar quarter after receipt of the delinquent complete cost report.(iv) A desk review or field audit shall not be performed on incomplete submissions. (B) If the Medicare filing deadline for submitting the Medicare cost report is delayed by the Medicare fiscal intermediary, and the provider fails to submit its Medicare cost report to the office on or before the due date as extended by the Medicare fiscal intermediary, the following shall apply:(i) The rate in effect immediately preceding the due date shall be reduced by ten percent (10%), effective the first day of the month after the due date, as extended by the Medicare fiscal intermediary. (ii) The reduced rate shall remain in effect until the first day of the month after the delinquent Medicare cost report is received by the office.(iii) Rate adjustments shall not be allowed until the first day of the calendar quarter after receipt of the delinquent complete cost report.(iv) A desk review or field audit shall not be performed on incomplete submissions.(2) Failure to submit a completed checklist of management representations concerning change in ownership (checklist) to the office within ninety (90) days after the date the checklist request is sent to the provider shall result in the following actions: (A) The rate in effect immediately preceding the due date shall be reduced by ten percent (10%), effective the first day of the month after the end of the ninety (90) day period.(B) The reduced rate shall remain in effect until the first day of the month after the completed checklist is received by the office.(C) A desk review or field audit shall not be performed until the completed checklist is received and reviewed.(3) If the required prefield information has not been submitted by the due date indicated in the audit notification letter, the following actions shall be taken: (A) The rate in effect immediately preceding the due date shall be reduced by ten percent (10%), effective the first day after the date the response was due.(B) The reduced rate shall remain in effect until:(i) the first day after the office's receipt of a complete response; or(ii) one (1) year after the effective date of the ten percent (10%) rate reduction.(C) Rate adjustments shall not be allowed until the first day of the calendar quarter after: (i) receipt of the information requested in the written notice; or(ii) one (1) year after the effective date of the ten percent (10%) rate reduction.(4) If the required field work information has not been submitted by the due date indicated in the field work - follow-up letter, the following actions shall be taken: (A) The rate in effect immediately preceding the due date shall be reduced by ten percent (10%), effective the first day after the date the response was due.(B) The reduced rate shall remain in effect until:(i) the first day after the office's receipt of a complete response; or(ii) one (1) year after the effective date of the ten percent (10%) rate reduction.(C) Rate adjustments shall not be allowed until the first day of the calendar quarter after: (i) receipt of the information requested in the written notice; or(ii) one (1) year after the effective date of the ten percent (10%) rate reduction.(5) If the documentation submitted for the field audit is inadequate or incomplete, or the ten percent (10%) reduction has expired, the following additional actions shall be taken: (A) Appropriate adjustments to the applicable cost report shall be made.(B) The office shall document the adjustments in a finalized exception report.(C) The office shall incorporate the adjustments in the prospective rate calculations.(g) If the office determines, due to an MDS review, a nursing facility has unsupported MDS resident assessments, the following procedures shall be followed in applying a corrective remedy:(1) The office shall: (A) review a sample of MDS resident assessments; and(B) determine the percent of assessments in the sample that are unsupported.(2) If the percent of assessments in the initial sample that are unsupported is:(A) greater than twenty percent (20%), the office shall expand to a larger sample of resident assessments; or(B) equal to or less than twenty percent (20%), the office shall conclude the field portion of the MDS review. (3) For rates effective beginning July 1, 2024, and later, a corrective remedy for unsupported MDS resident assessments shall be calculated as follows: (A) If the percentage of unsupported assessments for the initial and expanded sample of the assessments reviewed is greater than twenty percent (20%), a corrective remedy shall be applied. The corrective remedy shall be calculated as the administrative component portion of the legacy system Medicaid rate in effect for the current biannual period, multiplied by the applicable percentage as shown in the following table, and applied to the aggregate rate: | MDS Field Review for Which Corrective Remedy Is Applied | Administrative Component Corrective Remedy Percent |
| First MDS Review | 7.5% |
| Second consecutive MDS Review | 10% |
| Third consecutive MDS Review | 15% |
| Fourth or more consecutive MDS Review or Reviews | 25% |
(B) Shall be applied as follows: | MDS Review Exit Date* | Administrative Component Corrective Remedy Implementation Date* |
| April 1, 2024 - September 30, 2024 | January 1, 2025 |
| October 1, 2024 - March 31, 2025 | July 1, 2025 |
| *And each year thereafter | |
(C) If a corrective remedy is imposed, for purposes of determining the average allowable cost of the patient day for the administrative component, an adjustment shall not be made by the office to the provider's allowable administrative costs.(D) After completing an MDS review, the office shall recalculate the facility's Medicaid CMI. If the recalculated Medicaid CMI results in a change from the originally calculated Medicaid CMI, the value of the Medicaid CMI change shall be incorporated into a prospective reimbursement rate calculation as follows: | MDS Period Under Review** | MDS Change Implementation Date** |
| March 1, 2024 - August 31, 2024 | July 1, 2025 |
| September 1, 2024 - February 28*, 2025 | January 1, 2026 |
| *February 29 in Leap Years | |
| **And each year thereafter | |
(4) For rates effective prior to June 30, 2024, if the percentage of unsupported assessments for the initial and expanded sample of the assessments reviewed is greater than twenty percent (20%), a corrective remedy shall apply, calculated as follows: (A) The administrative component portion of the Medicaid rate in effect for the calendar quarter after completion of the MDS review shall be reduced by the percentage as shown in the following table: | MDS Field Review for Which Corrective Remedy Is Applied | Administrative Component Corrective Remedy Percent |
| First MDS Review | 15% |
| Second consecutive MDS Review | 20% |
| Third consecutive MDS Review | 30% |
| Fourth or more consecutive MDS Review or Reviews | 50% |
(B) If a corrective remedy is imposed, for purposes of determining the average allowable cost of the median patient day for the administrative component, an adjustment shall not be made by the office to the provider's allowable administrative costs.Office of the Secretary of Family and Social Services; 405 IAC 1-14.7-12; filed 8/20/2024, 9:11 a.m.: 20240918-IR-405240088FRA