PROPOSAL
Maryland Register
Issue Date:  September 2, 2016
Volume 43 • Issue 18 • Pages 1023—1025
 
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
[16-219-P]
The Secretary of Health and Mental Hygiene proposes to amend Regulations .07-1, .07-2, .10-1, .11-2, .11-7, .11-8, .15-1, and .25 under COMAR 10.09.10 Nursing Facility Services.
Statement of Purpose
The purpose of this action is to:
(1) Clarify language related to the cost reports used when setting capital costs and nursing services cost indexing;
(2) Extend the interim working capital fund;
(3) Change the source of acuity for the pay-for-performance program;
(4) Correct certain citations;
(5) Modify the factors used to calculate the amount of an indemnity bond or standby letter of credit; and
(6) Establish the budget adjustment factor in order to provide a rate increase of 2 percent in accordance with the Fiscal Year 2017 budget.
Comparison to Federal Standards
There is no corresponding federal standard to this proposed action.
Estimate of Economic Impact
I. Summary of Economic Impact. In accordance with the Program’s budget for Fiscal Year 2017, rates for nursing facility services will increase by 2 percent. In addition, working capital advances will result in loss of potential interest income to the State. All other changes are budget-neutral.
 
Revenue (R+/R-)
II. Types of Economic Impact.
Expenditure
(E+/E-)
Magnitude

 
A. On issuing agency:
(1)
(E+)
$41,628,157
(2)
(R-)
$133,959
B. On other State agencies:
NONE
C. On local governments:
NONE
Benefit (+)
Cost (-)
Magnitude

 
D. On regulated industries or trade groups:
(+)
$41,762,116
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(1). The average reimbursement rate for nursing facility services in Fiscal Year 2016 was $245.92. After a 2 percent increase in Fiscal Year 2017 under the provisions of the proposed amendments, the average rate will be $250.84. Based on a projected 5,600,208 Medicaid days in Fiscal Year 2016, and 5,656,320 days in Fiscal Year 2017, total Medicaid expenditures for nursing facility services will increase by $41,628,157.
($250.84 × 5,656,320) – ($245.92 × 5,600,208) = $41,628,157
A(2). The interim working capital fund will provide $12,955,404 to providers during Fiscal Year 2017, resulting in loss of potential interest income of $133,959, based on a rate of return of 1.034 percent.
D. Provider reimbursement for nursing facilities will increase by $41,628,157 during Fiscal Year 2017 as described in Section IIIA. Providers will also benefit from the State’s loss of potential interest income in the amount of $133,959 due to providing working capital advances.
Economic Impact on Small Businesses
The proposed action has a meaningful economic impact on small business. An analysis of this economic impact follows.
Eight nursing homes, which qualify as small businesses, are expected to account for 54,302 Medicaid days during Fiscal Year 2017. At an average increase in rates of $4.92 per day, the impact on small businesses is estimated as an increase in revenue of $267,166. The amount of benefit to small businesses due to the interim working capital fund is indeterminate.
Impact on Individuals with Disabilities
The proposed action has an impact on individuals with disabilities as follows:
The proposed action affects payments for services used by individuals with disabilities, but is not expected to have an impact on availability or access to services.
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 West 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 October 3, 2016. A public hearing has not been scheduled.
.07-1 Interim Working Capital Fund.
A.—H. (text unchanged)
I. The Interim Working Capital Fund expires on [May 1, 2015] May 1, 2017. Providers shall repay all outstanding funds to the Department by [May 1, 2015] May 1, 2017. The Department may grant repayment extensions of not longer than 60 days under extraordinary circumstances.
.07-2 Prospective Rates Effective January 1, 2015.
A.—K. (text unchanged)
L. Final facility rates for the period July 1, 2016 through December 31, 2016 shall be each nursing facility’s quarterly rate, exclusive of the amount identified in Regulation .11-8A(2) of this chapter, reduced by the budget adjustment factor of 6.076 percent, plus the Nursing Facility Quality Assessment add-on identified in Regulation .10-1E of this chapter and the ventilator care add-on amount identified in Regulation .11-8A(2) of this chapter when applicable.
M. Final facility rates for the period January 1, 2017 through June 30, 2017 shall be each nursing facility’s quarterly rate, exclusive of the amount identified in Regulation .11-8A(2) of this chapter, reduced by the budget adjustment factor of 8.212 percent, plus the Nursing Facility Quality Assessment add-on identified in Regulation .10-1E of this chapter and the ventilator care add-on amount identified in Regulation .11-8A(2) of this chapter when applicable.
.10-1 Rate Calculation — Capital Costs for Rates Effective January 1, 2015.
A. (text unchanged)
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)—(b) (text unchanged)
(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, or, if a cost report covering the date of valuation has not been filed by the facility, determine the closest match to the date of valuation available 2 months before the period for which final Capital rates are being calculated;
(d)—(m) (text unchanged)
(2) (text unchanged)
C.—E. (text unchanged)
.11-2 Pay-for-Performance — Quality Measures.
A. (text unchanged)
B. Staffing Levels.
(1) (text unchanged)
(2) Each Maryland facility covered by these regulations which fails to comply with [§G(1)] §B(1) of this regulation shall incur a 1 percentage point reduction in its applicable rental rate presented in [Regulation .10G(9)] Regulation .10-1B(1)(i) or (j) of this chapter.
(3) (text unchanged)
(4) A facility’s average acuity shall be determined [from claims for services provided by the facility] based on the facilities Minimum Data Set Resource Utilization Groups (RUG) during the [1-year] 6-month period ending [September 30] December 31 of the most recent [prior] State fiscal year. To establish expected staffing hours, each [day of care and procedure is multiplied by the daily hours required under Regulation .25B of this chapter and divided by the total days of care during the same period] RUG group will be multiplied by the corresponding hours under Regulation .25C of this chapter and divided by the total days of care during the same period.
(5)—(7) (text unchanged)
C.—G. (text unchanged)
.11-7 Rate Calculation — Nursing Service Costs for Rates Effective January 1, 2015.
A.—B. (text unchanged)
C. The final Nursing Service rate for each nursing facility for each quarter is calculated as follows:
(1)—(2) (text unchanged)
(3) Calculate a Medicaid adjusted Nursing Service cost per diem by multiplying the per diem identified under §B(2) or §C(5) 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; and
(5) For years between periods when the prices are rebased, the indexed Nursing Service cost per diem identified under §B(2) of this regulation shall be adjusted as set forth in Regulation .08-1D of this chapter.
D.—G. (text unchanged)
.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.—B. (text unchanged)
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)] Regulation .11-7F(6) of this chapter;
D.—G. (text unchanged)
.15-1 New Nursing Facilities, Replacement Facilities, and Change of Ownership for Rates Effective January 1, 2015.
A.—C. (text unchanged)
D. Change of Ownership.
(1) (text unchanged)
(2) Indemnity Bond or Standby Letter of Credit.
(a) The indemnity bond or standby letter of credit required by [§C(2)(a)(ii)] §D(1)(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 prior to January 1, 2015 outstanding;
(ii) All unpaid amounts due and owing the Program for each settled fiscal period before January 1, 2015; [and]
(iii) 10 percent of the Program billings for the most recent annual fiscal period; and
[(iii)] (iv) (text unchanged)
(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)] §D(1)(b)(iii) of this regulation and the amount of the financial obligation discharged by the court.
(3)—(5) (text unchanged)
.25 Nursing Service Personnel and Procedures.
A.—B. (text unchanged)
C. Minimum Data Set Resource Utilization Groups Hourly Weights.
RUG-IV 48
Total Hours
ES3
6.17733333
ES2
5.04483333
ES1
5.69500000
RAE
5.17450000
RAD
4.70150000
RAC
3.86266667
RAB
3.07583333
RAA
2.28500000
HE2
5.43733333
HE1
4.49366667
HD2
5.00533333
HD1
3.99700000
HC2
4.26566667
HC1
3.84616667
HB2
5.30500000
HB1
3.02300000
LE2
4.89816667
LE1
4.01933333
LD2
4.31583333
LD1
3.35383333
LC2
3.32883333
LC1
3.36916667
LB2
4.07566667
LB1
2.91083333
CE2
4.28650000
CE1
3.86816667
CD2
4.46816667
CD1
3.80533333
CC2
3.02250000
CC1
2.98650000
CB2
2.83283333
CB1
2.68883333
CA2
1.87200000
CA1
1.75983333
BB2
2.49116667
BB1
2.46466667
BA2
2.12716667
BA1
1.65100000
PE2
3.84716667
PE1
3.81933333
PD2
3.74566667
PD1
3.46050000
PC2
2.68133333
PC1
2.90283333
PB2
2.74100000
PB1
2.00416667
PA2
1.07683333
PA1
1.34950000
VAN T. MITCHELL
Secretary of Health and Mental Hygiene