N.J. Admin. Code § 8:85-3.9

Current through Register Vol. 56, No. 21, November 4, 2024

Section 8:85-3.9 - Limit and price calculation

(a) The Department shall establish the direct care limit for each Class I and Class II nursing facility.

1. For each cost report identified in 8:85-3.8, the Department shall fringe the direct care case mix costs and direct care non-case mix costs, as set forth in 8:85-3.5, for all cost reports effective for periods ending before December 31, 2010.

i. For periods ending on or after December 31, 2010, the Department shall select the direct care case mix costs and direct care non-case mix costs from the version of the cost report form used for the cost reporting period.

2. The Department shall adjust the costs identified in (a)1 above using the index factor developed from the most recent index factor publication as of May 1 preceding the rate year, as identified in 8:85-3.6, from the midpoint of each cost reporting period to the midpoint of the rate year for which the limit is used to establish rates.

3. The Department shall calculate a per diem adjusted cost as follows:

i. The adjusted direct care case mix costs shall be divided by the total resident days identified on the cost report to establish the adjusted direct care case mix cost per diem;

ii. The adjusted direct care non-case mix costs shall be divided by the total resident days identified on the cost report to establish the adjusted direct care non-case mix cost per diem; and

iii. The results of (a)3i and ii above shall be totaled to establish the adjusted total direct care cost per diem.

4. For each cost report, the normalization ratio shall be calculated as the Statewide average case mix index divided by the cost report period case mix index.

5. Each cost report's adjusted direct care case mix cost per diem shall be multiplied by the normalization ratio to arrive at the normalized direct care case mix cost per diem.

6. Each cost report's normalized direct care case mix cost per diem shall be added to the adjusted direct care non-case mix cost per diem established in (a)3ii above to arrive at the total normalized direct care per diem.

7. For each Class I NF, the cost report's Medicaid resident days shall be used in the array of per diem costs to calculate the Medicaid day weighted median of the total normalized direct care per diems.

8. The direct care limit for Class I NFs shall be 115 percent of the Medicaid day weighted median, and the direct care limit for Class II NFs shall be 105 percent of the Class I NF direct care limit.

(b) The Department shall establish the operating and administrative price for each Class I and Class II nursing facility.

1. For each Class I NF cost report identified in 8:85-3.8, the operating and administrative costs shall be fringed as set forth in 8:85-3.5 for all cost reports effective for periods ending before December 31, 2010.

i. For periods ending on or after December 31, 2010, the Department shall select the operating and administrative costs from the version of the cost report form used for the cost reporting period.

2. The costs identified in (b)1 above shall be adjusted using the index factor developed from the most recent index factor publication as of May 1 preceding the rate year as identified in 8:85-3.6, from the midpoint of each cost reporting period to the midpoint of the rate year for which the price is being established.

3. Each cost report's adjusted operating and administrative costs shall be divided by the total resident days identified on the cost report to arrive at the operating and administrative per diem.

4. For each Class I NF, the cost report's Medicaid resident days shall be used in the array of per diem costs to calculate the Medicaid day weighted median of the operating and administrative per diems.

5. The operating and administrative price for Class I NFs shall be 100 percent of the Medicaid day weighted median, and the operating and administrative price for Class II NFs shall be 104.50 percent of the Class I NF operating and administrative price.

N.J. Admin. Code § 8:85-3.9

Amended by R.1981 d.326, effective 9/10/1981 (operative October 1, 1981).
See: 13 N.J.R. 360(b), 13 N.J.R. 579(e).
(b)6: "115" was "110"; delete language concerning 10 percent latitude reduction.
Amended by R.1984 d.573, effective 12/16/1984.
See: 16 N.J.R. 2484(a), 16 N.J.R. 3437(a).
Amended by R.1987 d.6, effective 1/5/1987.
See: 18 N.J.R. 257(a), 19 N.J.R. 126(b).
Amended by R.1990 d.428, effective 8/20/1990 (operative October 1, 1990).
See: 22 N.J.R. 118(a), 22 N.J.R. 2588(a).
Revised (b)1, adding i.-iv. regarding minimum nursing requirements.
Amended by R.1993 d.371, effective 7/19/1993.
See: 25 N.J.R. 433(a), 25 N.J.R. 3215(a).
Recodified from 10:63-3.8 and amended by R.1994 d.624, effective 1/3/1995.
See: 26 N.J.R. 3614(a), 27 N.J.R. 156(a).
Amended by R.1995 d.174, effective 3/20/1995 (operative April 1, 1995).
See: 27 N.J.R. 281(a), 27 N.J.R. 1307(a).
Amended by R.1996 d.147, effective 3/18/1996.
See: 27 N.J.R. 3314(a), 28 N.J.R. 1535(a).
Recodified from N.J.A.C. 10:63-3.9 and amended by R.2005 d.389, effective 1/17/2006.
See: 36 N.J.R. 4700(a), 37 N.J.R. 1185(a), 38 N.J.R. 674(a).
Rewrote the section.
Repeal and New Rule, R.2011 d.121, effective 4/18/2011.
See: 42 N.J.R. 1793(a), 43 N.J.R. 961(c).
Section was "Routine patient care expenses".