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REGS : 10.09.10 Nursing Facility Services (MEDICAL CARE PROGRAMS)

PROPOSAL
Maryland Register
Issue Date:  January 9, 2015
Volume 42 • Issue 1 • Pages 36—48
 
Title 10
DEPARTMENT OF HEALTH AND MENTAL HYGIENE
Subtitle 09 MEDICAL CARE PROGRAMS
10.09.10 Nursing Facility Services
Authority: Health-General Article, §§2-104(b), 15-103, and 15-105, Annotated Code of Maryland
Notice of Proposed Action
[15-020-P]
The Secretary of Health and Mental Hygiene proposes to amend Regulations .01, .03—.07, .08, .09, .09-1, .10, .11, .11-2, .12—.17, and .28, and adopt new Regulations .07-2, .08-1, .09-2, .10-1, .11-7, .11-8, .12-1, .14-1, .14-2, .15-1, .16-1, and .17-1 under COMAR 10.09.10 Nursing Facility Services.
Statement of Purpose
The purpose of this action is to:
(1) Adopt prospective payment for providers of nursing facility services;
(2) Sunset certain current regulations and to implement, on a phased-in basis, a reimbursement methodology that is price-based, uses a more precise acuity adjustment for nursing services, and covers capital costs through a fair rental value approach; and
(3) Increase Medicaid rates for nursing facility services by 1.725 percent effective January 1, 2015, consistent with the Program’s budget for Fiscal Year 2015.
Comparison to Federal Standards
There is no corresponding federal standard to this proposed action.
Estimate of Economic Impact
I. Summary of Economic Impact. The Fiscal Year 2015 Medicaid budget for nursing facility services is increased by 0.8625 percent. Provider reimbursement rates did not increase July 1, 2014, but will increase by 1.725 percent effective January 1, 2015, increasing Program expenditures by $11,206,268. All other changes are budget-neutral.
 
 
Revenue (R+/R-)
 
II. Types of Economic Impact.
Expenditure
(E+/E-)
Magnitude
 

 
 
 
 
 
A. On issuing agency:
(E+)
$11,206,268
B. On other State agencies:
NONE
 
C. On local governments:
NONE
 
 
 
Benefit (+)
Cost (-)
Magnitude
 

 
 
 
 
 
D. On regulated industries or trade groups:
NONE
$11,206,268
E. On other industries or trade groups:
NONE
 
F. Direct and indirect effects on public:
NONE
 
III. Assumptions. (Identified by Impact Letter and Number from Section II.)
A. The Program projects that increasing reimbursement for nursing facility services by 1.725 percent will increase the average nursing home rate by $4.14 per Medicaid day of care. With a projection of 2,706,828 Medicaid days during the period January 1, 2015 through June 30, 2015, the result is an increase in nursing home reimbursement of $11,206,268.
D. Provider reimbursement for nursing facilities will be increased by $11,206,268 during Fiscal Year 2015 as described in Section A.
Economic Impact on Small Businesses
The proposed action has a meaningful economic impact on small business. An analysis of this economic impact follows.
Thirty-eight nursing homes, which qualify as small businesses, are expected to account for 386,500 Medicaid days during the period January 1, 2015 through June 30, 2015. At an average increase in rates of $4.14 per day, the impact on small businesses is estimated as an increase in revenue of $1,600,000.
Impact on Individuals with Disabilities
The proposed action has no impact on individuals with disabilities.
Opportunity for Public Comment
Comments may be sent to Michele Phinney, Director, Office of Regulation and Policy Coordination, Department of Health and Mental Hygiene, 201 W. Preston Street, Room 512, Baltimore, MD 21201, or call 410-767-6499 (TTY 800-735-2258), or email to dhmh.regs@maryland.gov, or fax to 410-767-6483. Comments will be accepted through February 9, 2015. A public hearing has not been scheduled.
.01 Definitions.
A. (text unchanged)
B. Terms Defined.
(1) “2012 final per diem rate” means a nursing facility per diem amount representative of the reimbursement methodology in effect before January 1, 2015 and is based on each nursing facility’s cost report ending in calendar year 2012.
[(1)] (2)[(7)] (8) (text unchanged)
(9) “Case mix index (CMI)” means a numeric score that identifies the average relative nursing resource needs for the residents classified under the Resource Utilization Group (RUG) based on the assessed nursing needs of the resident, whose values are set forth as CMI Set F01, located at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/NHQIMDS30TechnicalInformation.html.
(10) “Centers for Medicare and Medicaid Services (CMS)” means the federal agency that is located in the U.S. Department of Health and Human Services that administers the Medicare and Medicaid programs.
[(8)] (11)—[(11)] (14) (text unchanged)
(15) “Cost report period case mix index” means the simple average of the day weighted facility case mix indices for residents of all payer sources from the final quarterly resident rosters for a nursing facility, carried to four decimal places, for the quarterly resident roster periods that most closely match a cost reporting period.
[(12)] (16) (text unchanged)
[(13)] (17) “Current interim costs” means those costs in the Uniform Cost Report most recently submitted by a provider to the Department or its designee and which have been desk reviewed by the Department or its designee. [New facilities shall submit prospective budgets of costs to be desk reviewed and used as “current interim costs” for interim rate determination but not for ceiling computations.]
[(14)] (18)—[(19)] (23) (text unchanged)
(24) “Facility average Medicaid case mix index” means the day-weighted average case mix index for all identified Medicaid days from each nursing facility’s final resident roster for each resident roster quarter calculated as the sum of the number of days each assessment associated with a Medicaid payer source is active times the assessment CMI divided by the sum of all Medicaid payer source days.
[(20)] (25)—[(29)] (34) (text unchanged)
(35) “Market basket index” means inflation indices from the latest Skilled Nursing Home without Capital Market Basket Index, published 2 months before the period in which rates are being calculated and which is available from CMS at www.cms.gov, or a comparable index available from, and used by, CMS, if this index ceases to be published by Global Insight, Inc. or its successor.
[(30)] (36)—[(34)] (40) (text unchanged)
(41) “Medicare upper payment limit” means that aggregate payments to nursing facilities may not exceed the limits established for such payment in 42 CFR §447.272.
(42) “Minimum Data Set (MDS)” means the MDS required by 42 CFR §483.20 and set forth in the Resident Assessment Instrument published by CMS, and available at www.cms.gov, incorporated herein by reference, as amended and supplemented, a core set of screening, clinical, and functional status elements, including common definitions and coding categories that forms the foundation of the assessment required for all residents in Medicare-certified or Medicaid-certified nursing facilities.
[(35)] (43)—[(36)] (44) (text unchanged)
[(37)] (45) “New facility” means [a]:
(a) A facility that has not been a provider during the previous 12-month period or, for rates effective January 1, 2015 and after, does not have a cost report in the price database as set forth in Regulation .08-1B(1) of this chapter; and
(b) A facility not defined as a replacement facility.
[(38)] (46)—[(48)] (56) (text unchanged)
(57) “Prospective rate” means a facility-specific quarterly per diem rate effective January 1, 2015, and after, based on the RUG classification system, and calculated as the sum of:
(a) Administrative and Routine rate as calculated in accordance with Regulation .08-1 of this chapter;
(b) Other Patient Care Rate as calculated in accordance with Regulation .09-2 of this chapter;
(c) Capital Rate as calculated in accordance with Regulation .10-1 of this chapter; and
(d) Nursing Rate as calculated in accordance with Regulation .11-7 of this chapter.
[(49)] (58)—[(55)] (64) (text unchanged)
[(56)] (65) “Reimbursement class” means the [type] group of [provider] providers for which a separate maximum per diem rate or standard per diem rate will be prepared in the Administrative and Routine, Other Patient Care, and Nursing Service cost centers based on geographic [location] region as set forth in Regulation .24 of this chapter.
[(57)] (66) (text unchanged)
(67) “Replacement facility” means:
(a) A newly constructed nursing facility that replaces an existing licensed and certified facility; or
(b) A facility that was closed for significant renovation that reopens and is approved by the Department as a replacement facility.
(68) “Resident roster” means a list of all residents in a nursing facility for a calendar quarter based on MDS assessments and tracking forms, accurately and successfully transmitted by the nursing facility into the CMS-approved submission system, used for the calculated day-weighted case mix indices for Medicaid, Medicare, and other payment sources.
[(58)] (69) (text unchanged)
(70) “Resource Utilization Group (RUG)” means the version IV (RUG-IV), 48-Group classification system, that has been developed by CMS and set forth at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/NHQIMDS30TechnicalInformation.html for grouping nursing facility residents according to the residents’ functional status and anticipated uses of services and resources as identified from data supplied by the MDS.
[(59)] (71)[(63)] (75) (text unchanged)
(76) “Statewide average case mix index” means the simple average of all of the cost report period case mix indices for the rate year.
(77) “Statewide average Medicaid case mix index” means the Medicaid day weighted average of all nursing facilities’ case mix indices for the Medicaid days identified on the final resident rosters for each resident roster quarter.
[(64)] (78)[(71)] (85) (text unchanged)
.03 Conditions for Participation.
To participate in the Program, the provider shall:
A.—V. (text unchanged)
W. Not less than 30 days before the date of any change of ownership, except when the Program agrees to a shorter period, provide the Department the notification and indemnity bond, letter of credit, or certificate of assurance required by Regulation .15B(2) or .15-1C(2)(b) of this chapter.
.04 Covered Services.
The Program covers routine care and the following supplies, equipment, and services when appropriate to meet the needs of the recipient:
A.—D. (text unchanged)
E. Administrative days approved by the Department or its designee according to the conditions set forth in Regulation [.16D] .16E or .16-1D of this chapter.
F. (text unchanged)
G. Supplies and equipment necessary to meet the needs of the recipient, including but not limited to:
(1)—(45) (text unchanged)
(46)—(68) (text unchanged)
(69) [Stethescopes] Stethoscopes.
(70)—(72) (text unchanged)
(73) [Surgucal] Surgical dressings, including sterile sponges.
(74)—(86) (text unchanged)
H.—BB. (text unchanged)
.05 Limitations.
The following are not covered:
A. Services by an out-of-State [long-term] nursing facility unless [a provider agreement is executed by] the Department and the [long-term care] nursing facility execute a provider agreement;
B. (text unchanged)
C. [The portion of physical therapy services which is] Services reimbursed under Title XVIII of the Social Security Act; and
D. Services for which payment is made directly to a provider other than the nursing facility[;
E. Food supplement and tubing for recipients who are eligible for those services under Title XVIII of the Social Security Act].
.06 Preauthorization Requirements.
A. The Department of Human Resources shall certify the recipient for financial eligibility, and the Department or its designee shall certify the recipient as requiring nursing facility services, except as provided in Regulation [.16F] .16E or .16-1D of this chapter.
B. The Department or its designee will certify as requiring nursing facility services only those financially eligible recipients requiring nursing facility services as defined in Regulation [.01B(31)] .01B of this chapter.
.07 Payment Procedures — Maryland Facilities for Rates Effective on or Before December 31, 2014.
A. The Department shall pay the provider the sum of the rates calculated under the provisions of Regulations [.08—.11] .08, .09, .10 and .11 of this chapter. All interim per diem rates shall remain unchanged during the rate year unless documentation is submitted by the provider to the Department or its designee to demonstrate that a recalculation of the provider’s interim per diem rate for the Administrative and Routine, Other Patient Care, or Capital cost center would change by 5 percent (10 percent during the period July 1, 2009 through [June 30, 2014] December 31, 2014), or more or unless otherwise authorized by the Department. A provider may request an interim rate change in the Nursing Service cost center by submitting documentation to the Department or its designee to demonstrate that a recalculation of the provider’s interim per diem rate would change by 2 percent or more. For the cost of power wheelchairs or power wheelchair repairs, there is no requirement of a percent change in the Capital cost center. The revised interim per diem rates shall be applicable from the first whole month after submission of the request for revision to the end of the rate year. A provider may not request an interim rate change more than two times during the same rate year. Interim and maximum per diem rates shall be increased or decreased as necessary to the extent these adjustments are required by State law or Title XIX of the Social Security Act.
B. The per diem average of all projected Medicaid payments for all cost centers shall be determined in accordance with the provisions of §A of this regulation (and, for services provided during the period July 1, 2012 through June 30, 2013, in accordance with provisions of §C-1 of this regulation). When this average exceeds the average determined if payments were to be made for Medical Assistance Program covered services on the basis of Medicare’s principles of cost reimbursement, selected parameters of the rate determination process shall be adjusted downward in order to project a per diem patient average for Medicaid payments which does not exceed the Medicare Statewide class average. The following apply:
(1) (text unchanged)
(2) The per diem average of all projected Medicaid payments is to be estimated by:
(a) Applying the reimbursement provisions of Regulations [.08—.10] .08, .09, and .10 of this chapter to each facility for each cost center;
(b)—(d) (text unchanged)
(3) (text unchanged)
C.—C-1. (text unchanged)
C-2. With the exception of interim rate changes allowed in accordance with §A of this regulation, for services provided during the period July 1, 2013 through June 30, 2014, interim and maximum reimbursement rates shall remain [Unchanged] unchanged from those in effect for the period November 1, 2008 through July 31, 2009, except that rates calculated under the provisions of Regulations .08, .09, and .10 of this chapter shall be increased by 3.2 percent.
C-3. — D. (text unchanged)
.07-2 Prospective Rates Effective January 1, 2015.
A. For dates of service from January 1, 2015 through June 30, 2016, a 2012 final per diem rate shall be determined based on the following from each nursing facility’s cost report ending in 2012 and shall be adjusted by the nursing facility budget changes implemented from the settled 2012 rate through and including June 30, 2016:
(1) The Administrative and Routine final per diem rate identified under Regulation .08B of this chapter;
(2) The Other Patient Care final per diem rate identified under Regulation .09B of this chapter;
(3) The kosher kitchen add-ons identified under Regulations.08H and .09H of this chapter;
(4) The total amount of therapy payments identified under Regulation .09-1 of this chapter divided by the total Medicaid days excluding hospital bed hold days for the cost reporting period;
(5) The Capital component calculated as:
(a) Capital payments identified under Regulation .10 of this chapter, less the Nursing Facility Quality Assessment expense; and
(b) Divided by the total Medicaid days excluding hospital bed hold days; and
(6) The Nursing payments identified under Regulation .11C of this chapter divided by the total Medicaid days less Hospital Bed Hold Days and Therapeutic Leave Days.
B. Per diem rates paid for services beginning January 1, 2015, shall be calculated as follows:
(1) Rates paid for services January 1, 2015, through June 30, 2015, shall be calculated as the sum of:
(a) 75 percent of the 2012 final per diem rate in accordance with §A of this regulation;
(b) 25 percent of the prospective rate; and
(c) The Nursing Facility Quality Assessment add-on identified in Regulation .10-1E of this chapter;
(2) Rates paid for services July 1, 2015, through December 31, 2015, shall be calculated as the sum of:
(a) 50 percent of the 2012 final per diem rate in accordance with §A of this regulation;
(b) 50 percent of the prospective rate; and
(c) The Nursing Facility Quality Assessment add-on identified in Regulation .10-1E of this chapter;
(3) Rates paid for services January 1, 2016, through June 30, 2016, shall be calculated as the sum of:
(a) 25 percent of the 2012 final per diem rate in accordance with §A of this regulation;
(b) 75 percent of the prospective rate; and
(c) The Nursing Facility Quality Assessment add-on identified in Regulation .10-1E of this chapter; and
(4) Rates paid for services after June 30, 2016, shall be calculated as 100 percent of the prospective rate plus the Nursing Facility Quality Assessment add-on identified in Regulation .10-1E of this chapter.
C. Hold Harmless.
(1) For each provider, the Department shall determine the difference between the rate calculated in §A of this regulation and the rate calculated under §B(1)(a) and (b) of this regulation.
(2) If a provider’s rate determined under §B(1)(a) and (b) of this regulation is less than the rate under §A of this regulation, the provider shall be paid 100 percent of the rate under §A of this regulation during the period January 1, 2015 through June 30, 2015, plus the amount of the Nursing Facility Quality Assessment add-on identified in Regulation .10-1E of this chapter.
(3) During implementation of §B(2) of this regulation, providers identified in §C(2) of this regulation shall be paid the rate determined under §B(2) of this regulation plus 67 percent of the amount calculated in §C(1) of this regulation.
(4) During implementation of §B(3) of this regulation, providers identified in §C(2) of this regulation shall be paid the rate determined under §B(3) of this regulation plus 33 percent of the amount calculated in §C(1) of this regulation.
D. Hold Harmless Offset.
(1) The Department shall determine the total aggregate amount under §C(1) of this regulation for all facilities for which the rate determined under §B(1)(a) and (b) of this regulation is less than the rate under §A of this regulation.
(2) The Department shall determine the total aggregate amount under §C(1) of this regulation for all facilities for which the rate determined under §B(1)(a) and (b) of this regulation is greater than the rate under §A of this regulation.
(3) The Department shall determine the percentage of the amount in §D(2) of this regulation that is equal to the amount calculated under §D(1) of this regulation.
(4) The Department shall identify all facilities that have a rate determined under §B(1)(a) and (b) of this regulation that is greater than the rate identified under §A of this regulation.
(5) For each facility identified in §D(4) of this regulation, the Department shall multiply the amount by which §B(1)(a) and (b) of this regulation is greater than the rate identified under §A of this regulation by the percentage determined in §D(3) of this regulation.
(6) During implementation of §B(1) of this regulation, providers identified in §D(4) of this regulation shall be paid the amount determined under §B(1) of this regulation, minus 100 percent of the amount determined under §D(5) of this regulation.
(7) During implementation of §B(2) of this regulation, providers identified in §D(4) of this regulation shall be paid the amount determined under §B(2) of this regulation, minus 67 percent of the amount determined under §D(5) of this regulation.
(8) During implementation of §B(3) of this regulation, providers identified in §D(4) of this regulation shall be paid the amount determined under §B(3) of this regulation, minus 33 percent of the amount determined under §D(5) of this regulation.
E. When necessary, each facility’s per diem rate paid for services January 1, 2015 and after shall be reduced by the same percentage to maintain compliance with the Medicare upper payment limit requirement.
F. Power wheelchairs and bariatric beds are not included in either the 2012 final per diem rate or the prospective rate, but may be preauthorized for payment in accordance with COMAR 10.09.12.
G. Support Surfaces.
(1) Support surfaces are not included in either the 2012 final per diem rate or the prospective rate.
(2) A provider shall be paid a per diem rate for providing appropriate specialized support surfaces to patients with pressure ulcers or in recovery from myocutaneous flap or graft surgery for a pressure ulcer.
(3) A Class A support surface is a mattress replacement which has been approved as a Group 2 Pressure Reducing Support Surface by the Medical Policy of the Medicare Durable Medical Equipment Regional Carrier. A Class A support surface shall be reimbursed per day at the Medicare Durable Medical Equipment Regional Carrier Maryland monthly fee cap, in effect at the beginning of the State fiscal year, for HCPCS Code E0277 multiplied by 12 and then divided by the number of days in the State fiscal year.
(4) A Class B support surface is an air fluidized bed which has been approved as a Group 3 Pressure Reducing Support Surface by the Medical Policy of the Medicare Durable Medical Equipment Regional Carrier. A Class B support surface shall be reimbursed per day at the Medicare Durable Medical Equipment Regional Carrier Maryland monthly fee cap, in effect at the beginning of the State fiscal year, for HCPCS Code E0194 multiplied by 12 and then divided by the number of days in the State fiscal year.
H. Negative pressure wound therapy is not included in either the 2012 final per diem rate or the prospective rate, but is reimbursed in accordance with rates established under COMAR 10.09.12. Reimbursement shall include the cost of pumps, dressings, and containers associated with this procedure.
I. Nursing facilities that are owned and operated by the State are not paid in accordance with the provisions of §§A—C of this regulation, but are reimbursed reasonable costs based upon Medicare principles of reasonable costs as described at 42 CFR Part 413. Aggregate payments for these facilities may not exceed Medicare upper payment limits as specified at 42 CFR §447.272. If the Medicare upper payment limit is above aggregate costs for this ownership class, the State may elect to make supplemental payments to increase payments up to the Medicare upper payment limit.
.08 Rate Calculation — Administrative and Routine Costs for Rates Effective on or Before December 31, 2014.
A. (text unchanged)
B. The final per diem rate for administrative and routine costs in each reimbursement class is the sum of:
(1) (text unchanged)
(2) An efficiency allowance equal to the lesser of 50 percent (40 percent for the period November 1, 2008 through [June 30, 2014] December 31, 2014) of the amount by which the allowable per diem costs in §B(1) of this regulation are below the maximum per diem rate for this cost center, or 10 percent of the maximum per diem rate for the cost center.
C.—D. (text unchanged)
E. Maximum per diem rates for administrative and routine costs in each reimbursement class shall be established according to the following:
(1)—(4) (text unchanged)
(5) The maximum per diem rate for each reimbursement class shall be 114 percent (112 percent for the period November 1, 2008 through [June 30, 2014] December 31, 2014) of the lowest aggregate indexed current interim per diem cost, from §E(1) of this regulation, which is equal to the aggregate indexed current interim per diem costs associated with at least 50 percent of the paid Medical Assistance days in the reimbursement class.
F.—H. (text unchanged)
.08-1 Rate Calculation — Administrative and Routine Costs for Rates Effective January 1, 2015.
A. The Administrative and Routine cost center includes:
(1) Administrative expenses;
(2) Medical records expenses;
(3) Training expenses;
(4) Dietary;
(5) Laundry;
(6) Housekeeping;
(7) Operation and maintenance; and
(8) Capitalized organization and start-up costs.
B. The Department shall initially establish cost center prices for the rate period January 1, 2015 through June 30, 2015, and thereafter rebase the cost center prices between every 2 and 4 rate years. Prices may be rebased more frequently if the Department determines that there is an error in the data or in the calculation that results in a substantial difference in payment, or, if a significant change in provider behavior or costs has resulted in payment that is inequitable, across providers. The Department shall rebase based on the following steps:
(1) The price database shall be established using the most recent desk reviewed Nursing Home Uniform Cost Report for each current provider, or the immediately prior owner of that nursing facility, that is available 2 months before the period for which prices are being established or rebased;
(2) If no desk reviewed cost report is available, that provider shall be excluded from the price database;
(3) The total cost center expenses for each cost report in the price database shall be adjusted from the midpoint of each cost reporting period to the midpoint of the rate year for which the price is being established based on the following steps:
(a) A monthly market basket index shall be calculated based on the following calculations:
 
Market Basket Index Quarter
Assigned Month
Monthly Index
Quarter 1
January
33 percent of Quarter 4 prior year index plus 67 percent of Quarter 1 index
Quarter 1
February
100 percent of Quarter 1 index
Quarter 1
March
67 percent of Quarter 1 index plus 33 percent of Quarter 2 index
Quarter 2
April
33 percent of Quarter 1 index plus 67 percent of Quarter 2 index
Quarter 2
May
100 percent of Quarter 2 index
Quarter 2
June
67 percent of Quarter 2 index plus 33 percent of Quarter 3 index
Quarter 3
July
33 percent of Quarter 2 index plus 67 percent of Quarter 3 index
Quarter 3
August
100 percent of Quarter 3 index
Quarter 3
September
67 percent of Quarter 3 index plus 33 percent of Quarter 4 index
Quarter 4
October
33 percent of Quarter 3 index plus 67 percent of Quarter 4 index
Quarter 4
November
100 percent of Quarter 4 index
Quarter 4
December
67 percent of Quarter 4 index plus 33 percent of Quarter 1 next year index
 
(b) The index factor for each cost reporting period shall be calculated by dividing the index associated with the midpoint of the rate year by the index associated with the midpoint of the cost reporting period; and
(c) The indexed costs shall be calculated as total cost center expenses times the index factor;
(4) Each cost report’s indexed Administrative and Routine costs shall be divided by the greater of total resident days or days at full occupancy times an occupancy standard calculated as the Statewide average occupancy, not including providers with occupancy waivers, plus 1.5 percent to arrive at the Administrative and Routine cost per diem; and
(5) For each reimbursement class, each cost report’s Medicaid resident days shall be used in the array of Administrative and Routine cost per diems identified in §B(4) of this regulation to calculate the Administrative and Routine Medicaid day weighted median as follows:
(a) Array the Administrative and Routine cost per diems for each geographic region from low to high;
(b) For each Administrative and Routine cost per diem, identify the Medicaid days from the nursing facilities’ cost reports;
(c) Calculate a cumulative Medicaid day total; and
(d) Identify the median Administrative and Routine cost per diem as the Administrative and Routine per diem associated with the cumulative Medicaid days that first equals or exceeds half the number of total Medicaid days for the geographic region.
C. The final price for Administrative and Routine costs for each reimbursement class shall be calculated as the geographic regional Medicaid day weighted median multiplied by 1.025.
D. For years between periods when the prices are rebased, the final cost center price shall be adjusted by the change in the indexes as calculated in §B(3) of this regulation that correspond to midpoint of the prior rate year to the midpoint of the new rate year.
E. The final Administrative and Routine rate for each nursing facility is the Administrative and Routine price for its reimbursement class.
F. The reimbursement classes for the Administrative and Routine cost center are specified under Regulation .24A of this chapter.
G. Kosher Kitchen Add-on.
(1) Nursing facilities that maintain kosher kitchens and have Administrative and Routine costs in excess of the Administrative and Routine price in their reimbursement class that are attributable to dietary expense shall receive an add-on to its final price in an amount up to 15 percent of the median per diem cost for dietary expense in its reimbursement class.
(2) For years between periods when the kosher kitchen add-ons are rebased, the kosher kitchen add-on shall be calculated as the prior year kosher kitchen add-on multiplied by the rate year monthly index divided by the prior year monthly index as identified in §B(3)(a) of this regulation.
.09 Rate Calculation — Other Patient Care Costs for Rates Effective on or Before December 31, 2014.
A.—H. (text unchanged)
.09-1 Rate Calculation — Therapy Services for Rates Effective on or Before December 31, 2014.
A.—C. (text unchanged)
.09-2 Rate Calculation — Other Patient Care Costs for Rates Effective January 1, 2015.
A. The Other Patient Care cost center includes:
(1) Medical director administrative expenses;
(2) Pharmacy;
(3) Recreational activities;
(4) Patient care consultant services;
(5) Food cost (unprepared);
(6) Social services; and
(7) Religious services.
B. The Department shall initially establish Other Patient Care prices for the rate period January 1, 2015, through June 30, 2015, and thereafter rebase the Other Patient Care prices between every 2 and 4 rate years. Prices may be rebased more frequently if the Department determines that there is an error in the data or in the calculation that results in a substantial difference in payment, or if a significant change in provider behavior or costs has resulted in payment that is inequitable across providers. The Department shall rebase based on the following steps:
(1) The indexed costs shall be calculated as set forth in Regulation .08-1B(1)—(3) of this chapter;
(2) Each cost report’s indexed Other Patient Care costs shall be divided by the actual days of nursing facility services to arrive at the Other Patient Care cost per diem;
(3) For each reimbursement class, each cost report’s Medicaid resident days shall be used in the array of Other Patient Care cost per diems identified in §B(2) of this regulation to calculate the Other Patient Care Medicaid day weighted median using the method established in Regulation .08-1B(5) of this chapter;
(4) The final price for Other Patient Care costs for each reimbursement class is calculated as the geographic regional Medicaid day weighted median multiplied by 1.07; and
(5) For years between periods when the prices are rebased, the final price for Other Patient Care costs shall be calculated as set forth in Regulation .08-1D of this chapter.
C. The final Other Patient Care rate for each nursing facility is the Other Patient Care price for its reimbursement class.
D. The reimbursement classes for the Other Patient Care cost center are specified under Regulation .24B of this chapter.
E. Kosher Kitchen Add-on.
(1) Nursing facilities that maintain kosher kitchens and have Other Patient Care costs in excess of the Other Patient Care price in its reimbursement class that are attributable to food costs shall receive an add-on to its final price an amount up to 15 percent of the median per diem cost for food costs in its reimbursement class.
(2) For years between periods when the kosher kitchen add-ons are rebased, the kosher kitchen add-on shall be calculated as the prior year kosher kitchen add-on multiplied by the rate year monthly index divided by the prior year monthly index as identified in Regulation .08-1B(3)(a) of this chapter.
.10 Rate Calculation — Capital Costs for Rates Effective on or Before December 31, 2014.
A.—F. (text unchanged)
G. The net capital value rental for those facilities which are subject to rate determination under §C of this regulation is determined through the following steps:
(1)—(8) (text unchanged)
(9) The value of net capital from §G(7) of this regulation shall be multiplied by 0.0857 (0.0757 for the period November 1, 2008 through [June 30, 2014] December 31, 2014) except that, effective July 1, 2012, the value of the net capital for facilities located in Baltimore City shall be multiplied by 0.0942, in order to generate the net capital value rental.
H.—N. (text unchanged)
.10-1 Rate Calculation — Capital Costs for Rates Effective January 1, 2015.
A. The Capital cost center includes:
(1) Real estate taxes; and
(2) Fair rental value.
B. Final Capital Cost.
(1) The determination of a provider’s allowable final Capital per diem rate for the cost items under §A of this regulation is calculated as follows:
(a) Appraise each facility at least every 4 years;
(b) 2 months before the period for which final Capital rates are being calculated, determine the most recent appraisal for each facility;
(c) Determine the cost report for each facility that covers the date of valuation of the appraisal identified in §B(1)(b) of this regulation;
(d) Multiply the ending licensed nursing facility beds from the cost report in §B(1)(c) of this regulation by the land per bed amount from the appraisal to calculate a total land amount;
(e) Sum the total land amount, building, and equipment;
(f) Divide the total appraisal amount by the number of ending licensed nursing facility beds to determine an appraised value per bed;
(g) Apply a maximum appraised value per bed of $110,000;
(h) Multiply the final appraised value per bed times the number of ending licensed nursing facility beds to determine the facility’s gross value;
(i) For facilities in Baltimore City, multiply the facility’s gross value by 10 percent to determine the facility’s annual fair rental value;
(j) For facilities in all jurisdictions except Baltimore City, multiply the facility’s gross value by 8 percent to determine the facility’s annual fair rental value;
(k) Divide the facility’s annual fair rental value by the greater of actual resident days, or days at full occupancy times an occupancy standard calculated under Regulation .08-1B(4) of this chapter, to establish a fair rental value per diem rate;
(l) Divide real estate taxes obtained from the most recent desk reviewed cost report available 2 months before the start of the rate year by the greater of actual resident days, or days at full occupancy times an occupancy standard calculated under Regulation .08-1B(4) of this chapter, to establish a real estate tax per diem rate; and
(m) Sum the fair rental value and the real estate tax per diem rates.
(2) The appraisal may not include any value associated with a Certificate of Need for nursing home beds.
C. The final Capital rate for nursing facilities that have a change in the number of licensed beds or have replacement beds placed into operation during a State fiscal year shall not be recalculated as a result of that change until such time as an appraisal incorporating the changes is selected according to §B(3) of this regulation and used in the facility’s rate calculation.
D. The provider may protest the appraisal by submitting written notification to the Department within 90 days of receipt of the appraisal. If the protest cannot be resolved administratively, the provider may appeal under Regulation .28 of this chapter.
E. Nursing facilities that are required to pay an assessment in accordance with COMAR 10.01.20.02 shall receive a Quality Assessment add-on calculated as follows:
(1) Sum the assessed days reported on the Nursing Facility Quality Assessment Payment Reporting Forms for the quarters covering the calendar year preceding the rate year;
(2) Multiply the assessed days by the assessment rate established for the rate quarters; and
(3) Divide the total assessed amount by the sum of the total patient days reported on the quarterly Nursing Facility Quality Assessment Payment Reporting Forms.
.11 Rate Calculation — Nursing Service Costs for Rates Effective on or Before December 31, 2014.
A.—B. (text unchanged)
C. The final Medical Assistance reimbursement for nursing services is the lesser of:
(1) (text unchanged)
(2) The sum of:
(a) (text unchanged)
(b) 60 percent of the difference between the amount of the reimbursement calculated under §B(1) of this regulation and the amount of the costs under §C(2)(a) of this regulation, subject to a maximum of the reimbursements calculated under §B(1) of this regulation multiplied by 0.04 (0.035 for the period July 1, 2008 through October 31, 2008 and 0.03 for the period November 1, 2008 through [June 30, 2014] December 31, 2014);
(c)—(d) (text unchanged)
D.—V. (text unchanged)
.11-2 Pay-for-Performance — Quality Measures.
A. (text unchanged)
B. Staffing Levels.
(1) Maryland nursing facilities serving Medicaid patients shall provide salary data and hours of work data at least 3 months before the start of the new rate year. These data shall be for selected personnel types for a 2-week period to be specified by the Department.
(2) Each Maryland facility covered by these regulations which fails to comply with §G(1) of this regulation shall incur a 1 percentage point reduction in its applicable rental rate presented in Regulation .10G(9) of this chapter.
[(1)] (3) A facility’s average staffing level shall be determined from its most recent data reported in accordance with [Regulation .11G(1) of this chapter] §B(1) of this regulation. Total staff hours shall be divided by average daily census during the survey period in order to establish the facility’s average daily staffing.
[(2)] (4) (text unchanged)
[(3)] (5) The result from [§B(2)] §B(3) of this regulation shall be multiplied by 1.26555 in order to establish the facility’s staffing goal.
[(4)] (6) The facility’s staffing level from [§B(1)] §B(2) of this regulation shall be divided by the facility’s staffing goal from [§B(3)] §B(4) of this regulation in order to determine a score based on its percentage of the goal. A facility staffing exceeding its goal shall be scored at 100 percent.
[(5)] (7) (text unchanged)
C. Staff Stability.
(1) Staff stability is based upon dates of employment for nursing staff reported on the facility’s most recent salary and hours survey in accordance with [Regulation .11G(1) of this chapter] §B(1) of this regulation.
(2)—(3) (text unchanged)
D.—G. (text unchanged)
.11-7 Rate Calculation — Nursing Service Costs for Rates Effective January 1, 2015.
A. The Nursing Service cost center includes all nursing expenses related to the direct provision of patient care.
B. The Department shall initially establish Nursing Service prices for the rate period January 1, 2015, through June 30, 2015, and thereafter rebase the Nursing Service prices between every 2 and 4 rate years. Prices may be rebased more frequently if the Department determines that there is an error in the data or in the calculation that results in a substantial difference in payment, or if a significant change in provider behavior or costs has resulted in payment that is inequitable across providers. The Department shall rebase based on the following steps:
(1) The indexed costs shall be calculated as set forth in Regulation .08-1B(1)—(3) of this chapter;
(2) Each cost report’s indexed Nursing Service costs shall be divided by the actual days of nursing care to arrive at the indexed Nursing Service cost per diem;
(3) The indexed Nursing Service cost per diem shall be normalized to the Statewide average case mix index by multiplying the indexed Nursing Service cost per diem by the facility’s normalization ratio calculated as the Statewide average case mix index divided by the cost report period case mix index rounded to four decimals which creates the Normalized Nursing Cost per diem;
(4) For each reimbursement class, each cost report’s Medicaid resident days shall be used in the array of cost per diems identified in §B(3) of this regulation to calculate the Medicaid day weighted median using the method established in Regulation .08-1B(5) of this chapter;
(5) The final price for Nursing Service costs for each reimbursement class is calculated as the geographic regional Medicaid day weighted median Nursing Service cost multiplied by 1.0825; and
(6) For years between periods when the prices are rebased, the final price for Nursing Service costs shall be adjusted as set forth in Regulation .08-1D of this chapter.
C. The final Nursing Service rate for each nursing facility for each quarter is calculated as follows:
(1) Determine the Nursing Service price for the facility’s geographic region;
(2) Calculate an initial nursing facility rate by multiplying the price by the facility average Medicaid case mix index divided by the Statewide average case mix index;
(3) Calculate a Medicaid adjusted Nursing Service cost per diem by multiplying the per diem identified under §B(2) of this regulation by the Medicaid case mix adjustment ratio calculated as the facility average Medicaid case mix index divided by the cost report period case mix index rounded to four decimals; and
(4) Calculate the final Nursing Service rate as the initial nursing facility rate reduced by any positive difference between 95 percent of the initial nursing facility rate and the Medicaid adjusted Nursing Service cost per diem.
D. The reimbursement classes for the Nursing Service cost center are specified under Regulation .24C of this chapter.
E. Resident Rosters.
(1) A nursing facility shall electronically transmit MDS assessment information in a complete, accurate, and timely manner.
(2) The Department shall provide a preliminary resident roster to a nursing facility based on the facility’s transmitted MDS assessment information for a calendar quarter on the fifth day of the second month following the end of the calendar quarter, provided that the nursing facility has transmitted the MDS assessment information by the 15th day following the end of the calendar quarter.
(3) The distribution of the preliminary resident roster shall serve as notice of the MDS assessments transmitted and provide an opportunity for the nursing facility to correct and transmit any missing MDS record.
(4) The Department shall provide a final resident roster to a nursing facility based on the facility’s transmitted MDS assessment information for a calendar quarter, provided that the nursing facility has transmitted the MDS assessment information by the 25th day of the second calendar month following the end of the calendar quarter.
(5) The Department may not consider MDS assessment information for the purpose of reimbursement rate calculations for a calendar quarter that is not submitted by the 25th day of the second calendar month following the end of the calendar quarter, except as provided in §E(6) of this regulation.
(6) The Department may only grant an exception to compliance with the electronic MDS assessment transmission due dates if the delay has been caused by fire, flood, act of God, or other good cause.
(7) The Department or its designated contractor shall distribute preliminary and final resident rosters according to the following schedule:
 
Resident Roster Quarter
Preliminary Resident Roster Distributed
Facility’s Revised Resident Roster Transmission Due
Final Resident Roster Distributed
January 1 through March 31
May 5
May 25
June 15
April 1 through June 30
August 5
August 25
September 15
July 1 through September 30
November 5
November 25
December 15
October 1 through December 31
February 5
February 25
March 15
 
F. Case Mix Index Calculation.
(1) The Department shall use the resource utilization group to adjust Nursing Service costs and to determine each nursing facility’s Nursing Service rate component.
(2) The Department shall adjust a nursing facility’s case mix reimbursement rates quarterly based on the change in case mix of each facility according to the following schedule:
(a) The facility average Medicaid case mix index obtained from January 1 through March 31 shall be used to adjust rates effective July 1 through September 30 of the same calendar year;
(b) The facility average Medicaid case mix index obtained from April 1 through June 30 shall be used to adjust rates effective October 1 through December 31 of the same calendar year;
(c) The facility average Medicaid case mix index obtained from July 1 through September 30 shall be used to adjust rates effective January 1 through March 31 of the following calendar year; and
(d) The facility average Medicaid case mix index obtained from October 1 through December 31 shall be used to adjust rates effective April 1 through June 30 of the following calendar year.
(3) If the Department or its contractor determines that a nursing facility has delinquent MDS resident assessments, for purposes of determining both facility CMI averages, the assessments shall be assigned the case mix index associated with the RUG group “BC1” or its successor.
(4) A delinquent MDS shall be assigned a CMI value equal to the lowest CMI in the RUG classification system, or its successor.
(5) For each resident roster quarter, the Department shall calculate a Statewide average case mix index and a Statewide average Medicaid case mix index from all final resident rosters.
(6) A Medicaid case mix index equalizer shall be used to prevent any aggregate increase or decrease in expected State fiscal year Medicaid program expenditures for the rate quarters beginning every October, January and April, as follows:
(a) The Statewide average Medicaid case mix index for the July rate quarter shall be divided by the Statewide average Medicaid case mix index for the rate quarter identified in §F(2) of this regulation to determine the Medicaid case mix index equalizer for the quarter;
(b) Each facility average Medicaid case mix index for use in the rate quarter for each nursing facility shall be multiplied by the Medicaid case mix index equalizer to result in a facility Medicaid equalized case mix index; and
(c) The facility Medicaid equalized case mix index shall be used in place of the facility Medicaid case mix index in the calculation of the initial and final Nursing Service rate in §C of this regulation for every October, January, and April rate quarter.
(7) To determine cost report period case mix index for cost reporting periods starting before the midpoint of a calendar quarter, the associated quarterly resident roster period CMIs are used. If a cost report end date is before the midpoint of a calendar quarter, the associated quarterly resident roster period CMIs are not used.
G. Assignment of Different Geographic Region.
(1) The Department may approve a provider’s request to be included in a different Nursing Service cost center geographic region of this chapter upon review of sufficient documentation. Documentation shall show that the assigned geographic region is not appropriate for the provider and that economic conditions have placed the provider directly in competition with facilities in a geographic region other than the one to which the provider has been assigned by the Department. Payment of higher wages, or higher total expenditures, is not in itself sufficient to demonstrate that the provider is subject to economic conditions different from other providers in its reimbursement class.
(2) All approved waivers for geographic regions shall be effective for the following State fiscal year for the purpose of establishing the final Nursing Service rate in §C of this regulation,
(3) Nursing Service prices established in §B of this regulation shall be based on all facilities in a geographic region that do not have an approved waiver to be included in a different geographic region plus facilities with an approved waiver to receive prices in that geographic region.
.11-8 Ventilator Care Nursing Facilities Effective January 1, 2015.
Nursing facilities with licensed nursing facility beds, which have been determined by the Department to meet the standards for ventilator care under COMAR 10.07.02, shall be reimbursed as follows:
A. Services for residents receiving ventilator care shall be reimbursed as follows:
(1) The Nursing Service rate identified in Regulation .11-7 of this chapter shall be calculated with a facility average Medicaid case mix index that includes only residents receiving ventilator care; and
(2) An amount of $280 shall be added to the total prospective rate;
B. Rates under §A of this regulation shall be paid in full and are not subject to the phase-in provisions identified in Regulation .07-2B of this chapter;
C. The facility average Medicaid case mix index for rates under §A of this regulation are not subject to the Medicaid case mix index equalizer adjustment in Regulation .11-7F(2)(h) of this chapter;
D. Nursing facilities adding ventilator care services for the first time, which have been determined by the Department to meet the standards for ventilator care under COMAR 10.07.02, shall be reimbursed as described in §A of this regulation, except that the facility average Medicaid case mix index is assumed to be that of RUG classification ES3 (or its future equivalent);
E. The facility should request this rate from the Department at least 60 days before the opening of the ventilator unit;
F. For years between periods when the Nursing Services prices are rebased, the final price for Ventilator costs shall be adjusted as set forth in Regulation .08-1D of this chapter; and
G. Services for residents not receiving ventilator care shall be reimbursed as follows:
(1) The Initial Facility Nursing Service rate identified in Regulation .11-7 of this chapter shall be calculated with a facility average Medicaid case mix index that excludes residents receiving ventilator care;
(2) The 2012 final settlement per diem identified in Regulation .07-2B of this chapter shall be calculated exclusive of ventilator care costs; and
(3) The 2012 final settled per diem for nursing services exclusive of ventilator costs shall be calculated as follows:
(a) Determine the ratio of settled 2012 nursing costs, including incentives and add-ons, to interim payments;
(b) Multiply the ratio by 2012 interim payments for ventilator payments including heavy special daily rate payments and add-on payments included in additional procedures payments;
(c) Subtract the result from the total settled 2012 nursing cost including incentives and add-ons to compute the 2012 final settled per diem for nursing services exclusive of ventilator costs; and
(d) Divide by Medicaid patient days exclusive of Medicaid ventilator days per the 2012 final settlement report for nursing.
.12 Payment Procedures — Out-of-State Facilities for Rates Effective on or Before December 31, 2014.
A.—D. (text unchanged)
.12-1 Payment Procedures — Out-of-State Facilities for Rates Effective January 1, 2015.
A. Out-of-State nursing facilities that are not special rehabilitation nursing facilities and do not meet the exception to cost reporting requirements set forth in Regulation .13N of this chapter shall be reimbursed at a rate that is the lesser of:
(1) The average quarterly rate identified by Regulation .07-2 of this chapter for in-State nursing facilities minus the quality assessment; and
(2) The out-of-State facility’s Medicaid per diem rate provided by the state in which the facility is located, or, if the state provides the facility with more than one Medicaid per diem rate, the facility’s lowest per diem rate.
B. Out-of-State nursing facilities that are not special rehabilitation nursing facilities and do meet the exception to cost reporting requirements set forth in Regulation .13N of this chapter shall be reimbursed the average quarterly rate identified by Regulation .07-2 of this chapter for in-State nursing facilities minus the quality assessment.
C. Out-of-State special rehabilitation nursing facilities shall be reimbursed by the Program when the following conditions are met:
(1) The facility is accredited by the Commission on Accreditation of Rehabilitation Facilities;
(2) The facility is licensed and certified as a nursing facility; and
(3) Services for which reimbursement is requested have been preauthorized by the Program and subject to all utilization review requirements of Regulation .11I of this chapter or the MDS validation requirement of Regulation .11-7G of this chapter.
D. The rate for each resident in an out-of-State special rehabilitation nursing facility shall be negotiated to:
(1) Be less than the cost of available institutional alternatives; and
(2) Not exceed the home state’s Medicaid rate for the same service by the same provider if the provider participates in its home state Medicaid program.
.13 Cost Reporting.
A.—D. (text unchanged)
E. Financial and Statistical Data Required.
(1) The provider shall submit to the Department or its designee, in the form prescribed, financial and statistical data within 3 months after the end of the provider’s fiscal year unless the Department grants the provider an extension or the provider discontinues participation in the Program.
(2) [All providers] The provider shall submit nursing cost report data, in the form prescribed, for costs incurred from the end of their most recent fiscal period through June 30, 2003, by September 30, 2003. [When]
(3) If reports ending December 31, 2014 or before are not received within 3 months and an extension has not been granted, the Department shall withhold from the provider 10 percent of the interim payment for services provided during the calendar month after the month in which the report is due and any subsequent calendar month through the month during which the report has been submitted. This amount shall be repaid to the provider upon final cost settlement for the fiscal year from which the payments were withheld.
(4) If reports ending after December 31, 2014 are not received within 3 months and an extension has not been granted, the Department shall reduce the per diem rate by 3 percent for services provided during the calendar month after the month in which the report is due and any subsequent calendar month through the month during which the report has been submitted.
(5) If a provider discontinues participation, financial and statistical data shall be submitted to the Department within 45 days after the effective date of termination.
(6) A 1-month extension will be granted upon written request in advance by the provider. The Department may not grant an extension longer than 1 month unless the delay in filing the report has been caused by fire, flood, or act of God, and an extension is not allowed past March 31 after the calendar year during which the provider’s fiscal year ended unless the report cannot be submitted by that date due to fire, flood, or act of God.
F. (text unchanged)
G. When a report ending December 31, 2014 or before is not submitted by the last day of the sixth month after the end of the provider’s fiscal year, or a report ending December 31, 2014 or before is submitted but the provider cannot furnish proper documentation to verify costs, the Department shall make final cost settlement for that fiscal year at the last final per diem rates for which the Department has verified costs for that facility, provided that the rates established will not exceed the maximum per diem rates in effect when the facility’s costs were last settled.
H.—K. (text unchanged)
L. Except as indicated in §M of this regulation, administrative and routine, other patient care, and capital costs incurred by the provider exclusively for providing ventilator care are not allowed in these cost centers, but are allowable nursing service costs. [These] For payments for dates of service on or before December 31, 2014, these costs shall be identified and reported to the Department or its designee for the purpose of recalibrating the percentage adjustment under Regulation .11G(9)(h) of this chapter. This percentage shall be recalibrated at least every 3 years.
M. For any provider who provides ventilator care on 50 percent or more of its Maryland Medical Assistance days of care, all costs incurred by the provider exclusively for providing ventilator care are not allowable costs. At final settlement, for payments for dates of service on or before December 31, 2014, this provider will be reimbursed for each day of ventilator care at the standard per diem rate.
N. (text unchanged)
O. The notice required in §N(2) of this regulation shall include:
(1) (text unchanged)
(2) A statement that the provider agrees to accept as final reimbursement the average projected Medical Assistance payment calculated under Regulation .07B(2) of this chapter for each day of care rendered to a Maryland Medical Assistance recipient during the fiscal period, or for rates effective after December 31, 2014, the average rate paid to all other nursing facilities in the facility’s geographic region.
P. (text unchanged)
.14 Field Verification for Rates Effective on or Before December 31, 2014.
A.—C. (text unchanged)
C-1. [For the purpose of field verification or desk review of nursing service costs, the period July 1, 2001 through June 30, 2003 shall be considered as one reporting period. The nursing service costs for this period shall be subject to a tentative cost settlement process under Regulation .13E of this chapter] For each provider’s fiscal year that includes December 31, 2014, the final cost settlement shall be based on the portion of the fiscal year up through December 31, 2014.
D.—M. (text unchanged)
.14-1 Desk Reviews and Field Verification for Rates Effective January 1, 2015.
A. Desk Reviews.
(1) The Department or its designee may conduct a desk review of the costs before establishing the Administrative and Routine and Other Patient Care prices and Nursing Service rates.
(2) The Department or its designee shall notify each provider participating in the Program if any adjustments resulted from the desk review.
(3) Desk review adjustments shall be used in the computation of any future rate for the facility or the facility’s future owner that is based on the reported or desk reviewed costs, until the rate is rebased.
B. Field Verifications.
(1) The Department or its designee may conduct a field verification of the reported or desk reviewed costs affecting reimbursement rates.
(2) The Department or its designee shall notify each provider participating in the Program of the results of the field verification.
(3) Field audit adjustments shall be used in the computation of any future rate for the facility or the facility’s future owner that is based on the reported or desk reviewed costs, until the rate is rebased.
(4) Field audit adjustments shall be used in the recomputation of any past rate for the facility or the facility’s past owner that is based on the reported or desk reviewed costs.
(5) If the recomputation of rates results in a rate that differs more than 2 percent from the initial rate computation excluding the quality assessment, the Department shall initiate an adjustment for the impacted service dates within 60 days after the notification described in §B(2) of this regulation.
(6) Field audit adjustments shall only affect the facility’s rates and do not affect prices or rates for other facilities within the geographic region.
.14-2 MDS Validation and Ventilator Care Validation for Rates Effective January 1, 2015.
A. MDS Validation.
(1) In order to validate that the Nursing Service rate is supported by medical record documentation, accurately coded and submitted, the Department shall conduct periodic MDS validation reviews, which shall:
(a) Compare the MDS assessment coding with the corresponding medical record documentation to determine unsupported MDS assessments;
(b) Determine the completeness, timeliness, and accuracy of resident MDS assessments identified on the resident roster; and
(c) Determine the completeness and accuracy of the resident payment source listed on the resident roster.
(2) Findings from the MDS validation may be used to adjust a nursing facility’s per diem payment rate to reflect the validated case mix index used in the rate setting process.
B. Ventilator Care Validation.
(1) In order to validate that days paid for residents that meet the requirements for ventilator care are supported by medical record documentation of the need for ventilator care services, the Department shall conduct a periodic ventilator care validation.
(2) Findings from the ventilator care validation shall be used to recoup payments for days not supported by medical record documentation.
.15 Change of Ownership and Provider Status for Rates Effective on or Before December 31, 2014.
A.—F. (text unchanged)
.15-1 New Nursing Facilities, Replacement Facilities, and Change of Ownership for Rates Effective January 1, 2015.
A. The Department shall establish rates for new nursing facilities, replacement facilities, and nursing facilities with a change of ownership as outlined in §§B—D of this regulation.
B. New Nursing Facilities.
(1) Until such time as an appraisal for the new facility is available as set forth in Regulation .10-1B(3) of this chapter, the fair rental value portion of the Capital rate shall be based on the lower of the facility’s construction costs plus the assessed land value divided by the number of licensed beds, or the maximum appraised value per bed in Regulation .10-1B(8) of this chapter.
(2) A new nursing facility shall be assigned the Statewide average Medicaid CMI until assessment data submitted by the nursing facility is used in a quarterly rate determination.
(3) The nursing facility shall be assigned to the appropriate geographic region, as specified under Regulation .24 of this chapter, for purposes of assigning the Nursing Service rate, the Other Patient Care price, and the Administrative and Routine price.
(4) The geographic region price for Nursing Service costs shall be multiplied by the new nursing facility’s Medicaid CMI until there is a nursing facility cost report used in the rebasing process.
(5) The Capital rate shall use days as the greater of total estimated resident days or days at full occupancy times an occupancy standard calculated under Regulation .08-1B(4)of this chapter and the maximum bed value identified in Regulation .10-1B(8) of this chapter. For the period of time the facility is operating under a waiver of occupancy granted in accordance with Regulation .16-1F of this chapter, the Capital rate shall be calculated using estimated resident days. At the completion of the waiver period, either the State or the facility may initiate a settlement payment should the estimate vary from the actual by more than 10 percent.
(6) Upon providing the real estate bills to the State which incorporate the new construction at least 15 days before the start of operations or at least 15 days before the beginning of any calendar quarter, the real estate tax pass through amount shall be calculated in accordance with Regulation .10-1B(14) of this chapter. This amount shall be used for the period from the time of submission until the next facility cost report is filed. For the period of time the facility is operating under a waiver of occupancy granted in accordance with Regulation .16-1F of this chapter, the real estate tax rate shall be calculated using estimated resident days. At the completion of the waiver period, either the State or the facility may initiate a settlement payment should the estimate vary from the actual by more than 10 percent.
(7) For the first 2 State fiscal rate setting years, or portions thereof, new nursing facilities that are required to pay an assessment in accordance with COMAR 10.01.20.02 shall receive a Quality Assessment add-on calculated as follows:
(a) Estimate the assessed days to be reported on the Nursing Facility Quality Assessment Payment Reporting Forms for the quarters covering the upcoming State fiscal rate setting year or portion thereof;
(b) Multiply the estimated assessed days by the assessment rate anticipated for the rate quarters; and
(c) Divide the total estimated assessed amount by the sum of the total estimated patient days. At the completion of either of these first two rate setting periods, either the State or the facility may initiate a settlement payment should the estimates vary from the actual by more than 10 percent.
C. Replacement Facilities.
(1) Until such time as an appraisal for the replacement facility is available as set forth in Regulation .10-1B(3) of this chapter, the fair rental value portion of the Capital rate shall be based on the lower of the facility’s construction costs plus the assessed land value divided by the number of licensed beds, or the maximum appraised value per bed in Regulation .10-1B(8) of this chapter.
(2) The Capital rate shall use days as the greater of total estimated resident days or days at full occupancy times an occupancy standard calculated as the Statewide average under Regulation .08-1B(4) of this chapter. For the period of time the facility is operating under a waiver of occupancy granted in accordance with Regulation .16-1F of this chapter the Capital rate shall be calculated using estimated resident days. At the completion of the waiver period either the State or the facility may initiate a settlement payment should the estimate vary from the actual by more than 10 percent.
(3) Upon providing the real estate bills to the State, which incorporate the new construction, at least 15 days before to the start of operations or at least 15 days before the beginning of any calendar quarter, the real estate tax pass through amount shall be calculated in accordance with Regulation .10-1B(13) of this chapter. This amount shall be used for the period from the time of submission until the next facility cost report is filed. For the period of time the facility is operating under a waiver of occupancy granted in accordance with Regulation .16-1F of this chapter, the real estate tax rate shall be calculated using estimated resident days. At the completion of the waiver period either the State or the facility may initiate a settlement payment should the estimate vary from the actual by more than 10 percent.
(4) The replacement facility fair rental value rate shall be effective beginning on the date the replacement facility meets the requirements in Regulations .02 and .03 of this chapter.
(5) Except for the fair rental value portion of the Capital rate, the replacement facility shall be paid exactly as the original facility.
(6) The replacement facility rates shall be based on the original facility’s average Medicaid case mix index and cost report costs.
D. Change of Ownership.
(1) Except when the Program agrees to a shorter notification period, when there is an anticipated change of ownership of a provider, not less than 30 days before the date of the change of ownership:
(a) The provider shall:
(i) Notify the Program of the anticipated change of ownership; and
(ii) If the provider has not filed for bankruptcy, post an indemnity bond or a standby letter of credit, or provide assurance satisfactory to the Program that the purchaser shall assume and be responsible for all financial obligations of the existing provider; and
(b) The purchaser shall:
(i) Notify the Program of the intent to engage in a change of ownership and the desire to enroll in the Program;
(ii) Submit a provider application and execute a provider agreement with the Department before being assigned new interim per diem rates; and
(iii) If the provider has filed for bankruptcy, post an indemnity bond or a standby letter of credit, or provide some assurance satisfactory to the Program that the purchaser shall assume and be responsible for all financial obligations of the existing provider.
(2) Indemnity Bond or Standby Letter of Credit.
(a) The indemnity bond or standby letter of credit required by §C(2)(a)(ii) or (b)(iii) of this regulation shall be in the amount of:
(i) 10 percent of the Program billings for each unsettled fiscal period outstanding;
(ii) All unpaid amounts due and owing the Program for each settled fiscal period; and
(iii) All debt owed by the provider to the Interim Working Capital Fund under Regulation .07-1 of this chapter.
(b) If a court of competent jurisdiction discharges the debt of a bankrupt provider, the Program shall release to the purchaser the difference between the indemnity bond of standby letter of credit required under §C(2)(b)(iii) of this regulation and the amount of the financial obligation discharged by the court.
(3) The purchaser shall submit a provider application and execute a provider agreement with the Department before being assigned a prospective rate.
(4) The new owner shall assume the old owner’s facility average Medicaid case mix index and cost reports.
(5) The new owner shall be paid at the same rates as the old nursing facility provider except for the period of time the facility is operating under a waiver of occupancy granted in accordance with Regulation .16-1F of this chapter in which the Capital rate shall be calculated using estimated resident days. At the completion of the waiver period either the State or the facility may initiate a settlement payment should the estimate vary from the actual by more than 10 percent.
.16 Selected Costs — Allowable for Payments for Services Provided on or Before December 31, 2014.
The following costs are allowable in establishing interim and final per diem payment rates:
A.—F. (text unchanged)
.16-1 Selected Costs — Allowable for Payments for Services Provided Effective January 1, 2015.
A. Recreational Services. The allowable costs of recreational services of a facility shall be based on an hourly or salary rate, not on a fee-for-service basis.
B. Over-the-Counter Drugs. The cost of over-the-counter drugs is not to exceed the average wholesale price plus 50 percent, or the usual selling price, whichever is lower.
C. Leave of Absence. The Department shall pay the sum of the rates identified in Regulations .08-1, .09-2 and .10-1 of this chapter, less patient resources for the cost of reserving beds for recipients for therapeutic home visits or participation in State-approved therapeutic or rehabilitative programs, subject to the following conditions:
(1) The recipient’s plan of care provides for the absence;
(2) The leave of absence does not exceed 18 days during any calendar year;
(3) The recipient’s attending physician shall complete the physician’s authorization form not more than 30 days before the recipient’s anticipated leave of absence; and
(4) The facility submits the physician’s authorization form to the Department with the facility’s invoice, which covers the month in which the leave of absence occurred.
D. Administrative Days. The Department shall pay the sum of the rates identified in Regulations .08-1, .09-2, and .10-1 of this chapter, and 50 percent of the rate identified in Regulation .11-7 of this chapter, less patient resources for administrative days, documented on forms designated by the Department, which satisfy the following conditions:
(1) The recipient’s required level of care has changed, and the following conditions are met:
(a) The Department or its designee has determined that the recipient’s level of care is provided by an Intermediate Care Facility for Individuals with Intellectual Disabilities (ICF/IID);
(b) The provider has implemented a predischarge planning program and initiated placement activities for the recipient at the earliest appropriate time;
(c) The provider has actively pursued placement of the recipient at the required level of care in an appropriate facility during the entire period of administrative days;
(d) The provider has submitted documentation to the Department or its designee that it has complied with the requirements of §D(1)(a)—(c) of this regulation for the entire period of the administrative stay claimed for reimbursement; and
(e) The recipient is transferred promptly to the first available appropriate facility licensed and certified for the required level of care;
(2) When institutional care is no longer appropriate, and the following conditions are met:
(a) The Department or its designee has determined that the recipient no longer requires the level of care, which is provided by a nursing facility or Intermediate Care Facility for Individuals with Intellectual Disabilities (ICF/IID);
(b) The provider has implemented a predischarge planning program and initiated placement activities for the recipient at the earliest appropriate time;
(c) The provider has actively pursued placement of the recipient at the required level of care at home or in an appropriate setting during the entire period of administrative days;
(d) The provider has submitted documentation to the Department or its designee that it has complied with the requirements of §D(2)(a)—(c) of this regulation for the entire period of the administrative stay claimed for reimbursement; and
(e) The recipient is transferred promptly after appropriate placement has been found; and
(3) When the recipient is at an inappropriate level of care but cannot be moved, and the following conditions are met:
(a) The attending physician has declared that, because of physical or emotional problems, the recipient is unable to be moved;
(b) The reason the recipient cannot be moved is adequately documented by the attending physician in the recipient’s record; and
(c) Reevaluation by the attending physician of the recipient’s inability to be moved and appropriate documentation of it in the recipient’s record have been made at least every 60 days.
E. Bed Occupancy. The Statewide average occupancy, defined in Regulation .08-1B(4) of this chapter, shall be calculated after the exclusion of all providers which operated under a waiver of the occupancy standard during any part of the cost report period.
F. A waiver of the occupancy standards defined in Regulation .08-1B(4) of this chapter may be made by the Department under the following conditions:
(1) During a period not to exceed the first 12 months of operation for a newly constructed facility or for a newly constructed portion of an existing facility;
(2) During periods throughout which the occupancy standard could not be attained due to labor strike, fire, flood, or act of God, when this event is reported to the State licensing authority within 10 days of the event and request for waiver is submitted to the Program within 30 days of the event;
(3) For a period not to exceed 12 months when a voluntary reduction in licensed nursing facility bed capacity has been granted by the Department and the provider has received prior approval from the Program to reduce available beds while renovations are being completed;
(4) For a period not to exceed 12 months after a new provider acquires an existing facility which has been operated by the previous provider below the occupancy standard due to a ban on admissions, and when prior approval for the waiver has been granted by the Program;
(5) For a period not to exceed 12 months after a new provider acquires an existing facility which was in bankruptcy and operated below the occupancy standard at the time of purchase; or
(6) For a period not to exceed 12 months after a new provider has acquired or leased a building that was not licensed as a nursing facility immediately before the provider’s acquisition or lease.
G. When a waiver is granted under the provisions of §F of this regulation, the occupancy standards shall be applied to the reduced licensed capacity.
H. A waiver of the occupancy standards defined in Regulation .08-1B(4) of this chapter may not be allowed due to a ban on admissions or under any circumstances other than those described in §F of this regulation.
.17 Selected Costs — Not Allowable for Payments for Services Provided on or Before December 31, 2014.
The following costs are not allowable in establishing interim and final per diem payment rates:
A.—W. (text unchanged)
.17-1 Selected Costs — Not Allowable for Payments for Services Provided Effective January 1, 2015.
The following costs are not allowable in establishing prospective rates:
A. Costs not adequately documented;
B. Costs for chaplaincy training and other religious training programs;
C. Bad debts incurred by private pay or Medicare patients or third-party payers and bad debts resulting from denied costs of the Program;
D. Recipient resources certified as available for medical and remedial care by the Department of Human Resources which are uncollected;
E. Advertising expenses, except those necessary for personnel recruitment;
F. Stockholder costs incurred primarily for the benefit of stockholders or other investors, including the costs of stockholders’ annual reports and newsletters, annual meetings, mailing of proxies, stock transfer agent fees, stock exchange registration fees, stockbroker and investment analysis, stock issuance costs, and accounting and legal fees for consolidating statements for Securities and Exchange Commission purposes;
G. Any contributions, whether charitable or not, to any individual or organization;
H. Public relations expenses;
I. Costs of maintaining a recipient in a private room which exceeds costs of a semiprivate room;
J. Cost of depreciable assets and minor equipment useful for a lifetime of at least 2 years, with a historical cost of at least $500 or an aggregate historical cost of at least $500 if they are purchased in a quantity of like or similar items;
K. Civil money penalties, fines, and all costs associated with sanctions, including receivership, initiated by the Department or any other local, State, or federal government agency;
L. Interest paid by a provider under Regulations .14J(2) or .30E(5) of this chapter;
M. Administrator compensation for any owner, or relative of the owner, in excess of the limits established based on the results of the 2001 nonowner administrator compensation survey, trended forward based on the percentage of the annual increase or decrease in the All Items category of the Consumer Price Index for All Urban Consumers (CPI-U), as follows:
(1) For facilities with 1—74 beds, the median compensation from that group;
(2) For facilities with 75—199 beds, the median compensation from that group; and
(3) For facilities with 200 or more beds, the median compensation from all facilities with 200 or more beds;
N. Compensation for any administrator, who is not an owner, or relative of the owner, in excess of the limits established based on the results of the 2001 nonowner administrator compensation survey, trended forward based on the percentage of the annual increase or decrease in the All Items category of the Consumer Price Index for All Urban Consumers (CPI-U), as follows:
(1) For facilities with 1—74 beds, the 75th percentile compensation from that group plus 15 percent;
(2) For facilities with 75—199 beds, the 75th percentile compensation from that group plus 15 percent;
(3) For facilities with 200—299 beds, the 75th percentile compensation from all facilities with 200 or more beds plus 15 percent; and
(4) For facilities with 300 or more beds, 15 percent more than the limit established in §N(3) of this regulation for the facilities with 200—299 beds;
O. Assistant administrator compensation for any owner, or relative of the owner, in excess of 80 percent of the maximum administrator compensation for the facility established in accordance with §M of this regulation;
P. Compensation for any assistant administrator, who is not an owner, or relative of the owner, in excess of 80 percent of the maximum administrator compensation for the facility established in accordance with §N of this regulation;
Q. Central office employee compensation for any owner or relative of the owner in excess of the amount established in accordance with §M of this regulation, for the bed size category determined as the sum of beds if multiple facilities, plus 10 percent;
R. Compensation for any central office employee, who is not an owner, or relative of the owner, in excess of the amount established in accordance with §N of this regulation, for the bed size category determined as the sum of beds if multiple facilities, plus 10 percent;
S. Costs incurred in any effort to acquire a Certificate of Need or an exemption from a Certificate of Need for nursing home beds;
T. Costs incurred for specialized support surfaces used for pressure ulcer care;
U. Legal, accounting, and other professional expenses related to an appeal challenging a payment determination pursuant to Regulations .28 and .30E of this chapter unless a final adjudication is issued sustaining the nursing facility’s appeal;
V. A percentage of the legal, accounting, and other professional expenses related to an appeal as described in §U of this regulation, based upon the proportion of additional reimbursement denied to the total additional reimbursement sought on appeal, if a facility prevails on some but not all issues raised in the appeal or action;
W. Any charges assessed by the Department for recovery of overpayments; and
X. Direct service costs for physical, occupational, and speech therapy.
.28 Appeal Procedures.
A. (text unchanged)
[B. Providers filing appeals of final cost settlements shall do so according to:
(1) Regulation .30 of this chapter; and
(2) COMAR 10.01.09.]
B. Nursing Home Appeal Board.
(1) Appeals regarding cost report adjustments go to the Nursing Home Appeal Board.
(2) The Appeal Board shall be composed of the following members:
(a) A representative of the nursing home industry who is:
(i) Knowledgeable in Medicare and Medicaid reimbursement principles; and
(ii) Appointed by the Secretary;
(b) An individual who:
(i) Is employed by the State;
(ii) Knowledgeable in Medicare and Medicaid reimbursement principles;
(iii) Did not directly participate in the field verification or desk review; and
(iv) Is appointed by the Secretary; and
(c) A third member selected by the first two members of the Board.
(3) When the Board is reviewing an appeal from a provider in which a Board member is employed or in which he has a financial or personal interest, the Secretary shall designate an alternate for that member.
(4) If the provider elects to appeal to the Appeal Board and the Appeal Board finds in favor of the provider, the Department shall initiate a claims adjustment settlement for the impacted service dates within 60 days after the notification of the findings.
(5) The Department or any provider aggrieved by a reimbursement decision of the Appeal Board may not appeal to the Board of Review but may take a direct judicial appeal. The appeal shall be made as provided for judicial review of final decisions in the Administrative Procedure Act, §10-222, State Government Article, Annotated Code of Maryland.
(6) An appeal shall be filed in accordance with COMAR 10.01.09.
JOSHUA M. SHARFSTEIN, M.D.
Secretary of Health and Mental Hygiene
 
 
 

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