C.M.R. 10, 144, ch. 101, ch. III, 144-101-III-67, subsec. 144-101-III-67-1
The purpose of these principles is to provide for payment of nursing facility services provided under the MaineCare Program in accordance with Title XIX of the Social Security Act.
The Authority of the Department to accept and administer any funds which may be available from private, local, State or Federal sources for the provision of the services set forth in the Principles of Reimbursement is established in Title 22 of the Maine Revised Statutes Annotated, Sections 10 and 12. The regulations themselves are issued pursuant to authority granted to the Department by Title 22 of the Maine Revised Statutes Annotated Section 42(1).
A prospective case mix payment system for nursing facilities is established by these rules in which the payment rate for services is set in advance of the actual provision of those services. A nursing facility's base year cost report is used to review the facility's costs against these rules, to determine and identify which costs are allowable under this rule.
Department as used throughout these principles is the State of Maine Department of Health and Human Services.
State Licensing and Federal Certification as used throughout these principles is the "Regulations Governing the Licensing and Functioning of Nursing Facilities" and the Federal Certification requirements for nursing care facilities that are in effect at the time the cost is incurred.
Accrual Method of Accounting means that revenue is reported in the period when it is earned, regardless of when it is collected, and expenses are reported in the period in which they are incurred, regardless of when they are paid.
AICPA is the American Institute of Certified Public Accountants
Allowable Costs are costs that MaineCare will reimburse under these Principles of Reimbursement and that are below the caps (upper limits).
Ancillary Services are medical items or services identifiable to a specific resident furnished at the direction of a physician and for which charges are customarily made in addition to the per diem charge.
*The Department shall submit to CMS and anticipates approval for a State Plan Amendment related to these provisions.
*Base Year is a fiscal period for which the allowable costs are the basis for the case mix prospective rate. For the state fiscal year beginning July 1, 2018, the base year for each facility is its fiscal year that ended in the calendar year 2016. For state fiscal years beginning on or after July 1, 2019, subsequent rebasing must be based on the most recently filed cost report available by June 1st of the re-basing year.
For the state fiscal year beginning July 1, 2018, the rates set for each rebasing year shall include an inflation adjustment for a cost-of-living percentage change in nursing facility reimbursement each year in accordance with the United States Department of Labor Statistics Consumer Price Index - medical care services index from the prior December for professional services, nursing home, and adult day care services.
*Base Year Costs shall be the costs as shown on the cost report for the base year.
Capital Asset is defined as services, equipment, supplies or purchases which have a value of $500 or greater.
Case Mix Weight is a relative evaluation of the nursing resources used in the care of a given class of residents.
Cash Method of Accounting means that revenues are recognized only when cash is received and expenditures for expense and asset items are not recorded until cash is disbursed for them.
Centers for Medicare and Medicaid Services (CMS) is the agency within the U.S. Department of Health and Human Services (HHS) responsible for developing and implementing policies governing the Medicare and Medicaid programs.
Common Ownership exists when an individual possesses significant ownership or equity in the provider and the institution or organization serving the provider.
Compensation means total benefit provided for the administration and policy-planning services rendered to the provider. It includes:
Consumer Price Index (CPI) is the CPI published by the U.S. Department of Labor.
Control exists where an individual or an organization has the power, directly or indirectly, to significantly influence or direct the actions or policies of an organization or institution.
Cost Finding is the process of segregating costs by cost centers and allocating indirect cost to determine the cost of services provided.
Days of Care are the total number of days of care provided whether or not payment is received and the number of any other days for which payment is made. (Note: Bed held days and discharge days are included only if payment is received for these days.)
Direct Care Base Rate is the facility specific direct care cost per day as determined from the base year.
Direct Costs are costs that are directly identifiable with a specific activity, service or product of the program.
Discrete Costing is the specific costing methodology that calculates the costs associated with new additions/renovations of nursing facilities. None of the historical basis of costs from the original building are allocated to the addition/renovation.
Donated Asset is an asset acquired without making any payment in the form of cash, property or services.
Experience Modifier is the rating number given to nursing facilities based on worker's compensation claims submitted for the previous three (3) years. The lower the rating number, the better the worker's compensation claims ratio.
Fair Market Value is the price that the asset would bring by bona fide bargaining between well-informed buyers and sellers at the date of acquisition. Usually the fair market price will be the price at which bona fide sales have been communicated for assets of like type, quality, and quantity in a particular market at the time of acquisition.
Fixed Cost Component shall be determined based upon actual allowable costs incurred by an economically and efficiently operated facility.
Free Standing Facility is a facility that is not hospital-affiliated.
Front Line Employees are defined as all employees who work in the facility, except the administrator and contract labor.
Fringe Benefits include payroll taxes, qualified retirement plan contributions, group health, dental, and life insurance, cafeteria plans and flexible spending plans.
Generally Accepted Accounting Principles (GAAP) are accounting principles approved by the American Institute of Certified Public Accountants: those accounting principles with substantial authoritative support. In order of authority the following documents are considered GAAP:
Historical Cost is the cost incurred by the present owner in acquiring the asset. The historical cost shall not exceed the lower of:
In computing the historical cost the four (4) categories of assets will be evaluated, Land, Building, Equipment and Motor Vehicles. Each category will be evaluated based on the methods listed above.
Hospital-affiliated Nursing Facility is a nursing facility that is a distinct part of a hospital provider, located within the same building as the hospital unit or licensed as a hospital facility, or has ambulatory care services and nursing facility beds located within the same building or whose nursing facility beds were previously part of a hospital and relocated prior to January 1, 2005.
Land (non-depreciable) includes the land owned and used in provider operations. Included in the cost of the land are costs of such items as off-site sewer and water lines, public utility charges necessary to service the land, governmental assessments for street paving and sewers, the cost of permanent roadways and grading of a non-depreciable nature, the cost of curbs and sidewalks whose replacement is not the responsibility of the provider and other land expenditures of a nondepreciable nature.
Land Improvements (depreciable) include paving, tunnels, underpasses, on-site sewer and water lines, parking lots, shrubbery, fences, walls, etc. (if replacement is the responsibility of the provider).
Leasehold Improvements include betterments and additions made by the lessee to the leased property. Such improvements become the property of the leaser after the expiration of the lease.
MaineCare Utilization means, for nursing facilities, a fraction (expressed as a percentage), the numerator of which is the nursing facility's number of MaineCare days attributable to MaineCare patients whose claims were reimbursed for those days, and the denominator of which is the total number of the nursing facility's days of care for that period.
MDS is the Minimum Data Set currently specified by the Centers for Medicare and Medicaid Services for use by Nursing Facilities.
Necessary and Proper Costs are for services and items that are essential to provide appropriate resident care and activities at an efficient and economically operated facility. They are costs for services and items that are commonly provided and are commonly accepted as essential for the type of facility in question.
Net Book Value of an asset is the depreciable basis used under the program by the asset's last participation owner less the depreciation recognized under the program.
Nursing Facility is a nursing home facility licensed and certified for participation in the MaineCare Program by the State of Maine.
OBRA Assessment is the assessment defined by CMS as a schedule of assessments performed for a nursing facility resident at admission, quarterly, and annually, whenever the resident experiences a significant change in status, and whenever the facility identifies a significant error in a prior assessment. This assessment is the active assessment instrument used for evaluating members during their stay in a nursing facility. Reimbursement is based on these assessment outcomes. With the exception of the admission assessment, the active OBRA assessment sets the payment from the Assessment Reference Date (ARD) until the day before the ARD on the next required OBRA assessment. The admission assessment sets payment from the admission date until the next required OBRA assessment.
Owners include any individual or organization with ten percent (10%) equity interest in the provider's operation and any members of such individual's family or his or her spouse's family. Owners also include all partners and all stockholders in the provider's operation and all partners and stockholders or organizations that have an equity interest in the provider's operation.
Per Diem Rate is the total allowable costs divided by days of care. The prospective per diem rate, as described by days of care for MaineCare members, will determine reimbursement.
Policy Planning Function includes the policy-making, planning and decision-making activities necessary for the general and long-term management of the affairs of the facility, including, but not limited to the following:
Prospective Case-Mix Reimbursement System is a method of paying health care providers rates that are established in advance. These rates take into account the fact that some residents are more costly to care for than others.
Publicly Owned Nursing Facility must be owned and operated by the State, City, Town, or other local government entity and be receiving funding from that public entity for the purposes of operating and providing nursing facility services to the residents of the facility.
Reasonable Costs are those services and items for which a prudent and cost-conscious buyer would pay and which are essential for resident care and activities at the facility. If any of a provider's costs are determined to exceed by a significant amount, those that a prudent and costconscious buyer would have paid, those costs of the provider will be considered unreasonable in the absence of a showing by the provider that those costs were unavoidable.
Related to Provider means that the provider to a significant extent is associated or affiliated by common ownership with or has control of or is controlled by the organization furnishing the services, facilities, and supplies.
Stand Alone Nursing Facility is a facility that is not physically located within a hospital.
State Assistance as used in throughout these principles is the amount of funds appropriated by the Legislature in a specific State Fiscal Year for the purpose of assisting in the reimbursement of publicly owned nursing facilities for services provided to their residents.
State Fiscal Year is defined as July 1st of the first year through June 30th of the second year. Example: State fiscal year 05-06 begins July 1st of 2005 and ends June 30th of 2006.
Straight-line Method is a method of depreciation whereby the cost or other basis (e.g., fair market value in the case of a donated asset) of an asset, less its estimated salvage value, if any, is determined first. This amount is then distributed in equal amounts over the period of the estimated useful life of the asset.
Total Allowable Inflated Direct Care Rate Per Day is the facility base year direct care costs divided by the days of care, adjusted for case mix and wages and held to the direct care upper limit and inflated based on Principle 91 of these Principles.
Total Resident Census is the total number of residents residing in a nursing facility during the facility's fiscal year.
C.M.R. 10, 144, ch. 101, ch. III, 144-101-III-67, subsec. 144-101-III-67-1