C.M.R. 10, 144, ch. 101, ch. III, 144-101-III-67, subsec. 144-101-III-67-22

Current through 2024-51, December 18, 2024

Subsection 144-101-III-67-22 - ESTABLISHMENT OF PROSPECTIVE PER DIEM RATE

22.1Principle. For services provided on or after July 1, 2014, the Department will establish a prospective per diem rate to be paid to each facility until the end of its fiscal year. Each nursing facility's cost components for the base year, as determined from the as filed cost report will be the basis for the base year computations (subject to upper limits). Allowable costs are separated into three (3) components - direct, routine and fixed costs.

The base year direct and routine cost component costs will be trended forward using the guidelines as described in Principles 22.3 and 22.4, respectively. Thereafter, inflation will be based on Principle 31. The prospective rate shall consist of three (3) components: the direct care cost component as defined in Principle 16, the routine cost component as defined in Principle 17, and the fixed cost component as defined in Principle 18.

22.2Fixed Cost Component

The fixed cost component shall be determined from the most recent audited or, if more recent information is approved by the Department, it shall be based on that more recent information using allowable costs as identified in Principle 18. As described in Principle 18, fixed costs will be adjusted for providers whose annual level of occupancy is less than seventy percent (70%). The adjustment to fixed costs shall be based upon a theoretical level of occupancy of seventy percent (70%).

For all new providers coming into the program, the seventy percent (70%) occupancy adjustment will not apply for the first ninety (90) days of operation. It will, however, apply to the remaining months of their initial operating periods. To the extent that fixed costs are allowable, such cost will be adjusted for providers with sixty (60) or fewer beds whose annual level of occupancy is less than seventy percent (70%). The adjustment to the fixed cost component shall be based upon a theoretical level of occupancy of seventy percent (70%). The seventy percent (70%) occupancy rate adjustment will be applied to fixed costs and shall be cost settled at the time of audit. For all new providers of sixty (60) or fewer beds coming into the program, the seventy percent (70%) occupancy adjustment will not apply for the first thirty (30) days of operation. It will, however, apply to the remaining months of their initial operating period.

22.3Direct Care Cost Component

22.3.1Case Mix Reimbursement System

22.3.1.1 The direct care cost component utilizes a case mix reimbursement system. Case mix reimbursement takes into account the fact that some residents are more costly to care for than others. Thus the system requires:

(a) the assessment of residents on the Department's approved form -MDS as specified in Principle 16.2;

(b) the classification of residents into groups which are similar in resource utilization by use of the case mix resident classification groups as defined in Principle 22.3.2;

(c) a weighting system which quantifies the relative costliness of caring for different classes of residents by direct care staff to determine a facility's case mix index.

22.3.2Case Mix Resident Classification Groups and Weights

There are a total of forty-five (45) case mix resident classification groups, including one (1) resident classification group used when residents cannot be classified into one (1) of the forty-four (44) clinical classification groups.

Each case mix classification group has a specific case mix weight as follows:

RESIDENT CLASSIFICATION GROUP CASE MIX WEIGHT REHABILITATION
REHAB ULTRA HI/ADL	16 - 18	1.986
REHAB ULTRA HI/ADL	9 - 15	1.426
REHAB ULTRA HI/ADL	4 - 8	1.165
REHAB VERY HI/ADL	16 - 18	1.756
REHAB VERY HI/ADL	9 - 15	1.562
REHAB VERY HI/ADL	4 - 8	1.217
REHAB HI/ADL	13 - 18	1.897
REHAB HI/ADL	8 - 12	1.559
REHAB HI/ADL	4 - 7	1.260
REHAB MED/ADL	15 - 18	2.051
REHAB MED/ADL	8 - 14	1.635
REHAB MED/ADL	4 - 7	1.411
REHAB LOW/ADL	14 - 18	1.829
REHAB LOW/ADL	4 - 13	1.256
EXTENSIVE
EXTENSIVE 3/ADL 7-18/Head Injury - ADL	15 - 18	2.484
EXTENSIVE 2/ADL 7-18/Head Injury - ADL	10 - 14	2.057
EXTENSIVE 1/ADL 7-18/Head Injury - ADL	7 - 9	1.910
SPECIAL CARE
SPECIAL CARE/ADL	17 - 18	1.841
SPECIAL CARE/ADL	15 - 16	1.709
SPECIAL CARE/ADL	4 - 14	1.511
CLINICALLY COMPLEX
CLIN. COMP W/DEP/ADL	17 - 18D	1.826
CLIN. COMP/ADL	17 - 18	1.663
CLIN. COMP W/DEP/ADL	12 - 16D	1.503
CLIN. COMP/ADL	12 - 16	1.389
CLIN. COMP W/DEP/ADL	4 - 11D	1.331
CLIN. COMP/ADL	4 - 11	1.149
IMPAIRED COGNITION
COG. IMPAIR W/RN REHAB/ADL	6 - 10	1.199
COG. IMPAIR/ADL	6 - 10	1.152
COG. IMPAIR W/RN REHAB/ADL	4 - 5	0.945
COG. IMPAIR/ADL	4 - 5	0.888
BEHAVIOR PROBLEMS
BEHAVE PROB W/RN REHAB/ADL	6 - 10	1.180
BEHAVE PROB/ADL	6 - 10	1.123
BEHAVE PROB W/RN REHAB/ADL	4 - 5	0.905
BEHAVE PROB/ADL	4 - 5	0.759
PHYSICAL FUNCTIONS
PHYSICAL W/RN REHAB/ADL	16 - 18	1.454
PHYSICAL/ADL	16 - 18	1.421
PHYSICAL W/RN REHAB/ADL	11 - 15	1.323
PHYSICAL/ADL	11 - 15	1.281
PHYSICAL W/RN REHAB/ADL	9 - 10	1.219
PHYSICAL/ADL	9 - 10	1.088
PHYSICAL W/RN REHAB/ADL	6 - 8	0.833
PHYSICAL/ADL	6 - 8	0.854
PHYSICAL W/RN REHAB/ADL	4 - 5	0.776
PHYSICAL ADL	4 - 5	0.749
UNCLASSIFIED		0.749

22.3.3Base Year Direct Care Cost Component

22.3.3.1* Source of Base Year Cost Data. The source for the direct care cost component is the cost report for the nursing facility's base year except for facilities whose MaineCare rates are determined in accordance with Principles 22.5 and 22.6, as described in Principle 16.

The total inflated allowable base year direct care costs are divided by the total actual days. Recalculation of the upper limits shall not occur until subsequent rebasing of all components occurs.

22.3.3.2 Case Mix Index

The Office of MaineCare Services shall compute the facility specific case mix index for the base year as follows:

i)* First, calculate the nursing facility's 2016 average direct care case mix adjusted rate by dividing each facility's gross direct care payments received for their 2016 base year by their 2016 base year MaineCare direct care resident days.

(a)* Direct Care Regional Index

Each region's cost index shall be determined as follows:

i) The average case mix adjusted cost per day shall be calculated for each region from base year adjusted costs per day inflated to December 31, 2017.

ii) The lowest cost region shall be provided an index of 1.00. The other regional indices are computed by determining fifty percent (50%) of the percentage difference in cost between that region and the lowest cost region.

iii) The direct care regional indices are as follows:

Region I	- 1.08
Region II	- 1.02
Region III	- 1.00
Region IV	- 1.11

22.3.3.3Base year case mix and regionally adjusted MaineCare cost per day

Each facility's direct care case mix adjusted cost per day will be calculated as follows:

(a) The facility's direct care cost per day, as specified in Principle 22.3.3(1), is divided by the facility's base year case mix index and regional cost index to yield the case mix adjusted cost per day.

22.3.3.4* Array of the base year case mix and regionally adjusted cost per day

a. The direct care cost component is inflated from the end of the facility's base year to December 31, 2017 using the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index, Historical Consumer Price Index for Urban Wage Earners and Clerical Workers - Nursing Home and Adult Day service.

For each peer group (hospital based facilities, non-hospital based facilities with less than or equal to sixty (60) beds, and non-hospital based facilities with greater than sixty (60) beds), the Office of MaineCare Services shall array all nursing facilities case mix adjusted costs per day inflated to December 31, 2017 from high to low and identify the median.

b. Limits on the base year case mix and regionally adjusted cost per day. Within each peer group, the upper limit on the base year case mix and regionally adjusted cost per day shall be the median multiplied by one hundred ten percent (110%).

22.3.3.5 Each facility's case mix adjusted direct care rate shall be the lesser of the limit in Principle 22.3.3.4. or the facility's base year case mix and regionally adjusted cost per day multiplied by the regional cost index.

22.3.4Calculation of the Direct Care Component

The Office of MaineCare Services shall compute the direct resident care cost component for each facility as follows:

22.3.4.1Direct Care rate per day

The total direct care rate per day, as determined by 22.3.3, shall be calculated by multiplying the total inflated direct care rate by the applicable case mix index for the RUG group on the resident's active assessment (OBRA assessment).

22.3.4.2Direct Care Add-on

The direct care rate shall be increased by twenty-five percent (25%) of the excess of the base year direct care cost inflated to December 31, 2017 over the direct care rate, as determined in 22.3.4.1 using the facility-specific average case mix index for the base year as the applicable case mix index for this calculation and limited to a maximum of fifteen dollars ($15.00) per day. This direct care add-on is calculated only at the time of rebasing and is included as a direct care add-on to the direct care rate.

22.3.4.3 Add on to Support Essential Support Worker Wages at 125% of State Minimum Wage

Beginning July 1, 2022, there shall be an add-on to the direct care rate as necessary to enable providers to cover labor costs for essential support workers as defined in the 22 M.R.S. Sec.7401(3) sufficient to equal at least 125% of the minimum wage established in 26 M.R.S. Sec.664(1) including related taxes and benefits.

The Department will calculate the amount of the add-on based on cost reports and wage data obtained from providers during the rebasing process on a template provided by the Department. There shall be no add-ons for new providers, whose rates are established using pro form as pursuant to principles 16.3.1, 22.3.3.1, and 22.5.

The amount of the add-on shall be adjusted annually each January 1^st, when the minimum wage is adjusted. The amount of the add-on will not be adjusted by the Division of Audit. However, the add-on will be reconciled at the time of the audit settlement. The reconciliation will compare the authorized amount for the add-on to the amount paid through billing. Any over or under payments identified will be settled with the audit.

The add-on will not be case mix adjusted.

22.3.4.4Staffing Ratios

All facilities are responsible for meeting the minimum staffing ratios as outlined in 10-144, Chapter 110, Regulations Governing the Licensing and Functioning of Skilled Nursing Facilities and Nursing Facilities, Chapter 9.

22.3.4.5Direct Care Cost Settlement

For dates of service beginning on or after July 1, 2009 facilities that incur allowable direct care costs during their fiscal year that are less than their average prospective rate for direct care will receive their actual cost.

Facilities, which incur allowable direct care costs during their fiscal year in excess of their average prospective rate for direct care, will receive no more than the amount allowed by the prospective rate, except to the extent that the facility qualifies for High MaineCare Utilization.

22.4Routine Cost Component

Routine Cost component base year rates shall be computed as follows:

22.4.1 Using each facilities base year cost report, the provider's base year total allowable routine costs shall be determined in accordance with Principle 17.

22.4.2 The base year per diem allowable routine care costs for each facility shall be calculated by dividing the base year total allowable routine care costs by the total Base Year resident days.

22.4.3* The routine cost component is inflated from the end of the facility's base year to December 31, 2017 using the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Medical Care Services - Nursing Homes and Adult Day Care services. For each peer group (hospital based facilities, non-hospital based facilities with less than or equal to sixty (60) beds, and non-hospital based facilities with greater than sixty (60) beds), the Office of MaineCare Services shall array all nursing facilities base year costs per day inflated to December 31, 2017 from high to low and identify the median.

22.4.4 For each peer group, the upper limit on the base year cost per day shall be the median multiplied by one hundred ten percent (110%).

22.4.5* Each facility's Base Year Routine Care cost per diem rate shall be the lesser of the limit set in Principle 22.4.4 or the facility's base year per diem allowable routine care costs inflated to December 31, 2017.

22.4.6 Routine Cost Settlement. Effective for fiscal years beginning on or after October 1, 2001, facilities that incur allowable routine costs less than their prospective rate for routine costs may retain any savings as long as it is used to cover direct care costs. Facilities that incur allowable routine costs during their fiscal year in excess of the routine cost component of the prospective rate will receive no more than the amount allowed by the prospective rate, except to the extent that the facility qualifies for High MaineCare Utilization.

22.5Rates for Facilities Recently Sold, Renovated or New Facilities

22.5.1 A nursing home project that proposes renovation, replacement or other actions that will increase MaineCare costs and for which an application is filed after March 1, 1993 may be approved only if appropriations have been made by the Legislature expressly for the purpose of meeting those costs. The basis for establishing the facility's rate through the certificate of need review is the lesser of the rate supported by the costs submitted by the applicant or the statewide base year median for the direct and routine cost components inflated to the current period. The fixed costs determined through the Certificate of Need review process must be approved by the Office of MaineCare Services (also see Principle 18.2.3.4(2)).

22.5.1.1 For a facility sold after October 1, 1993, the direct and routine rate shall be the lesser of the rate of the seller or the rate supported by the costs submitted by the purchaser of the facility. The fixed cost component recognized by the MaineCare Program will be determined through the Certificate of Need review process. Fixed costs determined through the certificate of need review process must be approved by the Office of MaineCare Services.

22.5.2 Nursing facilities not required to file a certificate of need application, currently participating in the MaineCare Program, that undergo replacement and/or renovation will have their appropriate cost components adjusted to reflect any change in allocated costs. However, the rates established for the affected cost components will not exceed the state median rates for facilities in its peer group. In those instances that the data supplied by the nursing facility to the Department indicates that any one (1) component rate should be less than the current rate the Department will assign the lower rate for that component to the nursing facility. *22.5.3 The reimbursement rates set, as stated in Principles 22.5.1 and 22.5.2, will remain in effect for the period of three (3) years from the date that they are set under these Principles, except that those rates shall receive an inflation adjustment based on the Consumer Price Index (CPI), as described in Principle 22.3.3.4 and 22.4.3.

*The Department shall submit to CMS and anticipates approval for a State Plan Amendment related to this provision.

22.5.4 At the conclusion of the three (3) years, the reimbursement rate will be rebased to the fiscal year stated in Principles 16.3.1 and 17 or the most recent audited fiscal year occurring after the opening of the new facility, the completion of the new renovation, or the sale of the facility, whichever is the most current.

22.6Nursing Home Conversions

22.6.1 In reference to Public Law 1981, c. 705, Pt. V, §304, the following guidelines have been established in relation to how nursing facilities that convert nursing facility beds to residential care beds will be reimbursed. As required by §90.4, the savings incurred as a result of delicensing nursing facility beds must be returned to the MaineCare funding pool.

22.6.1.1 A pro forma step down cost report for the year in which the bed conversion will take place or the first full fiscal year in which the facility will operate with both nursing facility and residential care facility levels of care will be submitted to the Office of Aging and Disability Services and to the Division of Reimbursement and Financial Services of the Office of MaineCare Services.

22.6.1.2 Based on an analysis of the cost report by the Department, the allowable costs will be determined based on the Principles of Reimbursement for Nursing Facilities contained herein.

22.6.1.3 The occupancy level that will be used in the calculation of the rate will be set at the days included on the pro forma cost report submitted at the time of the conversion or at the ninety-five percent (95%) occupancy level, whichever is greater.

22.6.1.4 The case mix index will be determined as stated in Principles 16.2, 22.3.1, 22.3.2, and 22.3.3.2.

22.6.1.5 The upper limits for the direct and routine care cost components will be inflated forward to the end of the fiscal year of the pro forma cost report submitted as required in Principle 22.6.1.1.

22.6.1.6 The reimbursement rates set, as stated in Principles 22.6.1.1 and 22.6.1.5, will remain in effect for the period of three (3) years from the date that they are set under these Principles. The direct and routine components will be inflated to the current year, subject to the peer group cap. Reimbursement rates and all rate letters will have an effective date of the first day of the subsequent month after the date of the licensure change.

22.6.1.7 At the conclusion of the three (3) years, the reimbursement rate will be rebased to the fiscal year stated in Principles 16.3.1 and 17 or the most recent audited full fiscal year occurring after the conversion of nursing facility beds to residential care beds, whichever is the most current.

22.6.1.8 Principle 22.6 is effective for nursing facilities with the effective date of conversion of nursing facility beds to residential care facility beds occurring on or after January 1, 1996.

C.M.R. 10, 144, ch. 101, ch. III, 144-101-III-67, subsec. 144-101-III-67-22