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NOTICES

DEPARTMENT OF
HUMAN SERVICES

Payments to Nonpublic and County Nursing Facilities; Final Rates for State Fiscal Year 2018-2019

[48 Pa.B. 7465]
[Saturday, December 1, 2018]

 This notice announces the Department of Human Services (Department) final annual case-mix per diem payment rates for State Fiscal Year (FY) 2018-2019 for nonpublic and county nursing facilities that participate in the Medical Assistance (MA) Program.

Nonpublic Nursing Facility Per Diem Rates

 As required by the case-mix payment methodology in 55 Pa. Code Chapter 1187, Subchapter G (relating to rate setting), the Department sets an annual MA per diem rate for each nonpublic nursing facility provider. Each facility's annual per diem rate is comprised of four components: resident care; other resident related; administrative; and capital. For each quarter of FY 2018-2019, the Department will adjust the resident care component of each facility's rate by multiplying the resident care component by the facility's MA case-mix index for the appropriate picture date.

 The Centers for Medicare & Medicaid Services (CMS) approved State Plan Amendment (SPA) 17-0011 on September 15, 2017, which includes the budget adjustment factor (BAF) formula the Department will use for nonpublic nursing facilities in FY 2018-2019. SPA 17-0011 provides that the BAF will limit the estimated Statewide day-weighted average payment rate for MA nursing facility services for county and nonpublic nursing facilities so that the average payment rate in effect for the fiscal year is limited to the amount permitted by the funds appropriated by the General Appropriations Act for the fiscal year. The act of June 22, 2018 (P.L. 281, No. 42) (Act 42), among other things, provided a 1% rate increase beginning January 1, 2019. For FY 2018-2019, the Department will calculate a BAF for nonpublic nursing facilities for each rate quarter. The formula the Department uses to determine the quarterly BAF equals the annual target rate divided by the weighted average quarterly rate at 100%. If the quarterly BAF as calculated is greater than 1.0, the quarterly BAF will equal 1.0. Consistent with Act 42, the annual target rate will be adjusted when calculating the quarterly BAF for the January and April rate quarters. The quarterly BAF for each calendar quarter will be in the rate file that will be posted on the Department's web site.

County Nursing Facility Per Diem Rates

 As required by the rate methodology in 55 Pa. Code Chapter 1189, Subchapter D (relating to rate setting), the Department sets an annual MA per diem rate for each county nursing facility provider. As stated in 55 Pa. Code § 1189.91(b) (relating to per diem rates for county nursing facilities), for each rate year beginning on or after July 1, 2007, the per diem rate paid to a county nursing facility for a rate year will be the facility's prior rate year per diem multiplied by a BAF.

 In addition, as required by 55 Pa. Code § 1189.91(d), the Department used the formula set forth in the Commonwealth's approved State Plan to determine the BAF for county nursing facilities. CMS approved SPA 16-0033 on November 8, 2016, which includes the BAF formula the Department will use for county nursing facilities in FY 2018-2019.

 SPA 16-0033 provides that for rate setting year 2018-2019, the BAF shall limit the estimated Statewide day-weighted average payment rate for MA nursing facility services for county and nonpublic nursing facilities so that the average payment rate is limited to the amount permitted by the funds appropriated by the General Appropriations Act. Act 42, among other things, provided a 1% rate increase beginning January 1, 2019. The BAF as it applies to county nursing facilities is 1.0 for the period July 1 through December 31 and 1.01 for the period January 1 through June 30.

 The final annual per diem rates for FY 2018-2019 rate year are available on the Department's web site at http://www.dhs.pa.gov/provider/longtermcarecasemixinformation/index.htm and at local county assistance offices (CAO) throughout this Commonwealth or by contacting Marilyn Yocum, Department of Human Services, Office of Long-Term Living at (717) 772-2549. As they become available, the adjusted quarterly rates will be accessible on the Department's web site, at CAOs or by contacting Marilyn Yocum.

Public Process

 The Department published notice of the proposed payment rates and BAFs for FY 2018-2019 for both nonpublic and county nursing facilities at 48 Pa.B. 3825 (June 23, 2018). The notice invited public comments.

 Two commentators, a nursing facility trade association and a nonpublic nursing facility provider, submitted comments related to the reduction in rates for nonpublic nursing facilities in Peer Group 1. The commentators assert that Peer Group 1's rates were reduced due to the addition of two former county nursing facilities to the group and those facilities' low resident care costs.

 The Department disagrees with this premise. The regulations were followed and the rates were not artificially depressed. The most significant impact on Peer Group 1 was a decrease in audited allowable costs not attributable to the two former county nursing facilities. For rate setting purposes, the Department used the peer groups, peer group medians and peer group prices to determine case-mix rates for nonpublic nursing facilities in accordance with 55 Pa. Code Chapter 1187 (relating to nursing facility services). More information can also be found in the notice ''Peer Groups, Peer Group Medians and Peer Group Prices for Nonpublic Nursing Facilities Including Hospital-Based Nursing Facilities and Special Rehabilitation Facilities for Fiscal Year 2018-2019'' published in conjunction with this notice at 48 Pa.B. 7466 (December 1, 2018).

 The two commentators also submitted comments related to the effect of these fee-for-service payment rates on rates for nursing facility services paid by the Community HealthChoices managed care organizations. Since this notice is related to the Fee-for-Service Program, the comments are outside the scope of the notice.

Appeals

 Following publication of this notice, the Department will send rate letters to each MA nursing facility to notify the facilities of their final rates for FY 2018-2019. The rate letter will also advise each facility that it may file an administrative appeal if the facility believes that the Department made any errors or otherwise disagrees with its final rates for FY 2018-2019. A provider's appeal must be in writing and filed with the Department's Bureau of Hearings and Appeals, 2330 Vartan Way, 2nd Floor, Harrisburg, PA 17110-9721, within 33 days of the date ofthe Department's letter notifying the facility of its final rates. Facilities should refer to 67 Pa.C.S. Chapter 11 (relating to Medical Assistance hearings and appeals), and to the Department's regulations in 55 Pa. Code Chapter 41 (relating to Medical Assistance provider appeal procedures), for more detail regarding their appeal rights and the requirements related to written appeals.

Fiscal Impact

 For FY 2018-2019, the change in payment rates will result in an estimated increased cost of $11.193 million ($5.345 million in State funds) for per diem rate payments to nonpublic nursing facilities and an estimated increased cost of $1.464 million ($0.699 million in State funds) for per diem rate payments for county nursing facilities.

Public Comment

 Interested persons are invited to submit written comments regarding this notice to the Department of Human Services, Office of Long-Term Living, Bureau of Policy and Regulatory Management, Attention: Marilyn Yocum, P.O. Box 8025, Harrisburg, PA 17105-8025. Comments received within 30 days will be reviewed and considered for any subsequent revision of the notice.

TERESA D. MILLER, 
Secretary

Fiscal Note: 14-NOT-1284. (1) General Fund; (2) Implementing Year 2018-19 is $6,044,000; (3) 1st Succeeding Year 2019-20 is $8,462,000; 2nd Succeeding Year 2020-21 through 5th Succeeding Year 2023-24 are $1,495,000; (4) 2017-18 Program—$1,099,000,000; 2016-17 Program—$1,082,000,000; 2015-16 Program—$968,083,000; (7) Long-Term Care; (8) recommends adoption. Funds have been included in the budget to cover this increase.

[Pa.B. Doc. No. 18-1870. Filed for public inspection November 30, 2018, 9:00 a.m.]



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