N.Y. Comp. Codes R. & Regs. tit. 14 § 578.9

Current through Register Vol. 46, No. 43, October 23, 2024

Section 578.9 - A residential treatment facility for children and youth with inadequate cost experience

(a) Rates of payment for a residential treatment facility with inadequate cost experience shall be determined on the basis of satisfactory cost projections contained in budgets and other information submitted to the commissioner by the residential treatment facility. Budgets shall be submitted to the commissioner no later than 120 days prior to the date on which the rates of payment will be effective. The form and content of any such budgets may vary as prescribed by the commissioner. A residential treatment facility shall submit to the commissioner, within 15 days of a written request therefor, any additional information the commissioner determines is necessary to compute or revise rates of payment in accordance with this section.

(b) The rate of payment for a newly certified residential treatment facility shall be computed from a budget report. The budget report period shall cover the facility's first 12 months of operation. The commissioner may require that the budget be divided into several interim periods during the first 12 months and be extended to include subsequent periods, not to exceed an additional 12 months. The commissioner may further require specialized reports regarding staffing, utilization, capital costs, and cash flow.

(1) For a newly certified residential treatment facility which expects to achieve a minimum average utilization of 90 percent during the first year of operation, the rate of payment shall be developed from the first 12-month budget report.

(i) The budgeted operating and capital costs shall be reviewed to determine the allowed costs in accordance with the reimbursement principles contained in section 578.14 of this Part.

(ii) The operating portion of the allowed cost shall then be adjusted from the budget period to the period upon which the cost category standards were calculated using the applicable trend factors as specified in section 578.8 of this Part, or as determined by the commissioner if trend factors are not specified for a particular period.

(iii) The adjusted operating cost shall then be limited to the maximum amounts contained in the cost category standards from section 578.8(a)(2)-(4) of this Part, and then trended to the appropriate rate period.

(iv) The operating per diem rate of payment shall be calculated based upon the total possible patient days of the residential treatment facility at 90 percent utilization.

(v) Capital costs shall be calculated on a per diem basis using the total possible patient days of the residential treatment facility at 90 percent utilization.

(2) For a newly certified residential treatment facility which expects an average utilization of less than 90 percent during the first year of operation, the rate of payment shall be developed from the budget report(s), and a utilization and staffing plan approved by the commissioner. The plan shall estimate the month-by-month utilization and staffing of the residential treatment facility for the first 12 months of operation, and for the second 12 months as applicable. In no instance shall the phased utilization plan exceed one year.

(i) The budgeted operating and capital costs shall be reviewed to determine the allowed costs in accordance with the reimbursement principles contained in section 578.14 of this Part.

(ii) The allowed operating cost shall then be adjusted from the budget period to the period upon which the cost category standards were calculated using the applicable trend factors as specified in section 578.8 of this Part, or as determined by the commissioner if trend factors are not specified for a particular period.

(iii) The adjusted allowed cost shall then be limited to the maximum amounts as contained in the cost category standards from section 578.8(a)(2)-(4) of this Part. The maximum amount for administration, maintenance and support costs shall be the cost category per diem multiplied by the total possible patient days of the residential treatment facility at 90 percent utilization. Reimbursement is calculated by determining the lower of the adjusted allowed budgeted cost or the maximum amount, and trending the result to the budget report period.

(iv) The per diem rate of payment for operating and capital costs shall be calculated based upon patient days contained in the approved utilization plan.

(v) More than one rate of payment may be calculated to coincide with the residential treatment facility's planned utilization, and budgeted costs; which shall be determined at the commissioner's discretion.

(vi) The residential treatment facility shall submit monthly reports of actual utilization during the first year of operation.

(vii) If the residential treatment facility's actual monthly utilization significantly exceeds the residential treatment facility's planned monthly utilization, the rates of payment shall be recalculated using reimbursable operating and capital costs as determined in subparagraphs (i)-(iii) of this paragraph, trended to the appropriate period, and divided by actual patient days. The commissioner may adjust retroactively or prospectively the residential treatment facility's rates of payment.

(c) For a currently certified residential treatment facility increasing certified bed capacity by 20 percent or more, the rate of payment shall be determined in accordance with paragraph (b)(1) of this section. However, the commissioner shall take into consideration the actual cost and patient day experience of the existing residential treatment facility when reviewing budget(s), and shall expect the reconfigured residential treatment facility to demonstrate economies of scale.

(d) For a currently certified residential treatment facility decreasing certified bed capacity by 20 percent or more, the rate of payment may be computed using the facility's existing reimbursement adjusted by the budgeted variable costs associated with the decrease in certified capacity. Rate(s) of payment may be calculated to reflect a phase down period, and a budget based period thereafter. Each period may not exceed 12 months.

(1) Rates of payment calculated for the phase down period shall be developed from the residential treatment facility's existing reimbursement, adjusted by any variable cost decreases or extraordinary cost increases, and adjusted by the phase down utilization. More than one rate of payment may be calculated to coincide with the facility's phase down period, which shall be determined at the commissioner's discretion.

(i) The existing rate of payment is multiplied by the patient days used in the calculation of that rate of payment, resulting in a dollar amount of reimbursement.

(ii) The amount of reimbursement is adjusted by the applicable amount of variable cost decrease and the amount of any extraordinary cost associated with the phase down.

(iii) The total reimbursement is then divided by the product of the targeted certified capacity for the applicable period of the phase down, multiplied by the number of days in the period and by a minimum utilization of 96 percent.

(2) The rate of payment for the subsequent budget based period shall be developed from the residential treatment facility's existing reimbursement, adjusted by any variable cost decreases or extraordinary cost increases, adjusted for inflation as appropriate, and adjusted to the staffing standards for medical/clinical and nursing categories, as approved by the commissioner.

(i) The existing rate of payment is multiplied by the patient days used in the calculation of that rate of payment, resulting in a dollar amount of reimbursement. The reimbursement is then increased by an appropriate inflation factor, as determined by the commissioner.

(ii) The amount of reimbursement is adjusted by the applicable amount of variable cost decrease and the amount of any extraordinary cost associated with the phase down.

(iii) Costs for the medical/clinical and nursing categories are deleted, and are substituted as follows. Medical/clinical and nursing costs are computed using the full time equivalent staffing standards, as approved by the commissioner, multiplied by the facility's salary and fringe benefit cost experience. The resulting combined amount is subject to the average salary and fringe benefit screens, as specified in section 578.8(a)(2)(ii) and (iii) of this Part, multiplied by the approved staffing standards. The cost data is made comparable by applying the appropriate trend factors as determined by the commissioner.

(iv) Capital costs shall be updated in accordance with the approved costs as specified in section 578.8(a)(5) of this Part.

(v) The total reimbursement (the sum of immediately preceding subparagraphs [i] through [iv] of this paragraph) is then divided by the product of the certified capacity for the phased down budget based period, multiplied by the number of days in the period and by a minimum utilization of 96 percent.

(e) Financial reports pursuant to section 578.5 of this Part shall be submitted within 120 days as follows in accordance with whichever is earlier, either:

(1) the first six-month period during which the residential treatment facility has operated at an average six-month utilization of at least 90 percent; or

(2) one year after the first resident was admitted to the residential treatment facility. If the facility has not attained an average of 90 percent utilization in the first year of operation, the commissioner may adjust the report period to reflect a period where utilization has averaged 90 percent.

(f) Upon submission of the financial reports pursuant to subdivision (e) of this section, the commissioner may, at his discretion, adjust retroactively the residential treatment facility's budget-based rate(s) of payment to more accurately reflect the costs of operating the facility. The facility shall receive the lower of its actual cost or its budget based rate of payment.

N.Y. Comp. Codes R. & Regs. Tit. 14 § 578.9