1. (B) Subacute facilities that do not have historical costs shall receive an interim reimbursement rate. This interim rate shall be based on the subacute facility's projection of their total patient days and costs, as approved by the Department. When actual subacute audit report data becomes available, interim rates shall be retroactively adjusted to the subacute facility's final prospective rate. Final rates may be less than the interim rate, in which case the Department shall recover any overpayment. Only subacute facilities participating in the program as of June 1st shall be in included in the rate study.
2. (b) Payments to nursing facilities with subacute care units for patients on bedhold receiving acute services shall be in accordance with section 51535.1(d).
3. (c) The provisions of section 51511 shall apply to subacute care units except for section 51511(a). Section 51511(c) shall apply to subacute providers with the exception of items included within the subacute rate pursuant to section 51511.5(d).

4. (d) Included within the subacute care per diem rate are all services, equipment and supplies necessary for the administration of the treatment procedures listed in the patient care criteria including but not limited to:

   1. (1) Oxygen and all equipment necessary for administration including positive pressure apparatus.
   2. (2) Ventilators, including calibration and maintenance.
   3. (3) Feeding pumps and equipment necessary for tube feedings, including formula.
   4. (4) Speech therapy.
   5. (5) Occupational therapy.
   6. (6) Physical therapy.
   7. (7) Equipment and supplies necessary for the care of a tracheostomy.
   8. (8) Lab, X-ray and transportation services.
   9. (9) Equipment and supplies for continuous IV therapy.
   10. (10) Equipment and supplies necessary for debridement, packing and medicated irrigation with or without whirlpool treatment.

5. (e) For purposes of this section, the effective rate year is August 1st through July 31st.

   1. (2) If the audit of a cost report as described in subsection (f)(1) is not issued by July 1 of the effective rate year, the Department shall establish the facility's interim costs based on the cost report with a fiscal period ending January 1, three calendar years prior to the effective rate year, through December 31, three calendar years prior to the effective rate year, adjusted by an audit disallowance factor as listed in the chart below:

      Type of Licensure

      Audit Disallowance Factor Per Rate Year

      2004-05

      2005-06

      2006-07

      Subacute Care

      Reimbursement

      .95566

      .95211

      .95211

   2. (3) The Department will use the facility's interim costs as the facility's projected costs for purposes of subsection (a). In addition, facilities that did not provide subacute care services to Medi-Cal patients during the cost report period, facilities that combine subacute and distinct part nursing facility Level B costs, and/or facilities with less than a full year's reported cost shall not be included for purposes of establishing the projected class median costs.
   3. (4) If the facility's interim costs, as specified in subsection (f)(2), are established for a facility when the audit report is issued or when the cost report is deemed true and correct under Welfare and Institutions Code Section 14170(a)(1), the Department shall adjust the facility's reimbursement rate retroactively to August 1 of the effective rate year, to reflect the facility's costs determined pursuant to such an audit, or to reflect the costs in the cost report in the event that the cost report is deemed true and correct.
   4. (5) Interest will accrue from August 1 of the effective rate year, and be payable on any underpayment or overpayment resulting from the application of subsection (f)(4) at a rate equal to the monthly average received on investment in the Surplus Money Investment Fund (as referenced in Welfare and Institutions Code Section 14171) during the month the audit report is issued.
   5. (6) If a provider appeals an audit adjustment pursuant to Welfare & Institutions Code Section 14171, and there is a determination that the audit findings inaccurately reflect the audited facility's projected costs, the provider shall be entitled to seek a retroactive adjustment in its reimbursement rate but the resulting reimbursement rate shall not exceed the prospective rate of reimbursement as provided in subsection (a).

   (f)(1) The facility's projected costs for purposes of subsection (a) shall be based on the audit report findings of cost reports with fiscal periods ending January 1 through December 31, three calendar years prior to the effective rate year. In the event that a facility's audit report finding does not include subacute ancillary costs, the facility's projected ancillary costs will be based on the median of the subacute ancillary costs of facilities that had audited ancillary costs.

6. (g) Payment under subsection (a) shall only be made for services authorized pursuant to conditions set forth in Section 51335.5 for patients determined to need subacute care services.

(a)(1) For the 2003-04, 2004-05, and 2005-06 rate years, the prospective rate of reimbursement, which shall be the all-inclusive per diem rates of reimbursement for subacute services as defined in Section 51335.5(a), shall be the lesser of the facility's costs as projected by the Department or the rate based on the class median rates continued from the prior year, as set forth below:

Type of Licensure

Type of Patient

Class Median- Based Rate Per Rate Year

2004-05

2005-06

2006-07

Hospital-based

Ventilator dependent

$580.07

$614.11

$704.88

Freestanding

Ventilator dependent

$409.72

Hospital-based

Non-ventilator dependent

$553.15

$584.97

$674.05

Freestanding

Non-ventilator dependent

$381.45

For freestanding adult subacute facilities only, payment for service includes the Quality Assurance Fee pursuant to Health and Safety Code Section 1324.21.

(2)(A) For each effective rate year, a facility that experienced a reduction in projected facility costs, which would result in a reduced subacute reimbursement rate for the effective rate year pursuant to subsection (a)(1), shall have its subacute prospective reimbursement rate for the effective rate year set at its prior year's rate.

Note: Authority cited: Section 20, Health and Safety Code; and Sections 10725, 14105 and 14124.5, Welfare and Institutions Code. Reference: Section 14132.25, Welfare and Institutions Code; Statutes of 2004, Chapter 208, Items 4260-101-0001 and 4260-101-0890; Statutes of 2005, Chapter 38, Items 4260-101-0001 and 4260-101-0890; and Statutes of 2006, Chapter 48, Items 4260-101-0001 and 4260-101-0890.

History

1. Certificate of Compliance as to 10-27-88 order including amendment of subsection (d) transmitted to OAL 2-24-89 and filed 3-27-89 (Register 89, No. 13). For prior history, see Register 89, No. 1.

2. Amendment filed 8-7-89 as an emergency; operative 8-7-89 (Register 89, No. 32). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 12-5-89.

3. Certificate of Compliance transmitted to OAL 12-1-89 and filed 1-2-90 (Register 90, No. 2).

4. Amendment filed 12-10-90 as an emergency; operative 12-10-90 (Register 91, No. 6). A Certificate of Compliance must be transmitted to OAL by 4-9-91 or emergency language will be repealed by operation of law on the following day.

5. Amendment of subsection (a) and heading filed as an emergency 3-14-91; operative 3-14-91 (Register 91, No. 14). A Certificate of Compliance must be transmitted to OAL by 7-12-91 or emergency language will be repealed by operation of law on the following day.

6. Certificate of Compliance as to 12-10-90 order transmitted to OAL 4-8-91 and filed 5-8-91 (Register 91, No. 24).

7. Amendment of subsection (c) and repealer of subsections (e) and (f) filed 5-21-91 as an emergency pursuant to Statutes of 1990, chapter 456, section 36, p. 1658-1659; operative 5-22-91 (Register 91, No. 27). A Certificate of Compliance must be transmitted to OAL by 9-19-91 or emergency language will be repealed by operation of law on the following day.

8. Certificate of Compliance as to 3-14-91 order transmitted to OAL 7-11-91 and filed 8-9-91 (Register 91, No. 50).

9. Amendment of subsection (a) and Note filed 8-12-91 as an emergency; operative 8-12-91 (Register 92, No. 6). A Certificate of Compliance must be transmitted to OAL 12-10-91 or emergency language will be repealed by operation of law on the following day.

10. Certificate of Compliance as to 8-12-91 order transmitted to OAL 12-9-91 and filed 1-2-92 (Register 92, No. 18).

11. Amendment of subsection (c) refiled 1-23-92 as an emergency; operative 1-17-92 (Register 92, No. 25). A Certificate of Compliance must be transmitted to OAL 5-22-92 or emergency language will be repealed by operation of law on the following day.

12. Certificate of Compliance as to 1-23-92 order transmitted to OAL 5-22-92 and filed 7-6-92 (Register 92, No. 28).

13. Amendment of subsection (a) and Note filed 12-3-92 as an emergency; operative 12-3-92 (Register 92, No. 49). A Certificate of Compliance must be transmitted to OAL 4-2-93 or emergency language will be repealed by operation of law on the following day.

14. Certificate of Compliance as to 12-3-92 order transmitted to OAL 4-2-93 and filed 5-14-93 (Register 93, No. 20).

15. Amendment of subsection (a) and Note filed 8-24-93 as an emergency; operative 8-24-93 (Register 93, No. 35). A Certificate of Compliance must be transmitted to OAL by 12-22-93 or emergency language will be repealed by operation of law on the following day.

16. Amendment of subsection (a) and Note refiled 12-20-93 as an emergency; operative 12-20-93 (Register 93, No. 52). A Certificate of Compliance must be transmitted to OAL by 4-21-94 or emergency language will be repealed by operation of law on the following day.

17. Certificate of Compliance as to 12-20-93 order transmitted to OAL 3-22-94 and filed 4-28-94 (Register 94, No. 17).

18. Amendment of subsection (a), new subsections (e)-(l) and amendment of Note filed 10-16-95 as an emergency; operative 10-16-95 (Register 95, No. 42). A Certificate of Compliance must be transmitted to OAL by 2-13-96 or emergency language will be repealed by operation of law on the following day.

19. Editorial correction of History 18 (Register 96, No. 6).

20. Amendment of subsection (a), new subsections (e)-(l) and amendment of Note refiled 2-5-96 as an emergency; operative 2-5-96 (Register 96, No. 6). A Certificate of Compliance must be transmitted to OAL by 6-6-96 or emergency language will be repealed by operation of law on the following day.

21. Certificate of Compliance as to 2-5-96 order transmitted to OAL 6-4-96 and filed 7-12-96 (Register 96, No. 28).

22. Amendment of subsections (a), (e)-(g) and (i)-(j) and Note filed 9-19-96 as an emergency; operative 9-19-96 (Register 96, No. 38). A Certificate of Compliance must be transmitted to OAL by 1-17-97 or emergency language will be repealed by operation of law on the following day.

23. Certificate of Compliance as to 9-19-96 order transmitted to OAL 1-17-97 and filed 3-3-97 (Register 97, No. 10).

24. Amendment of subsections (a), (f)-(g) and (i)-(j) and amendment of Note filed 12-31-97 as an emergency; operative 12-31-97 (Register 98, No. 1). A Certificate of Compliance must be transmitted to OAL by 4-30-98 or emergency language will be repealed by operation of law on the following day.

25. Editorial correction of subsection (f) designator and History 24 (Register 98, No. 24).

26. Certificate of Compliance as to 12-31-97 order transmitted to OAL 4-27-98 and filed 6-9-98 (Register 98, No. 24).

27. Amendment of subsections (a), (e), (g) and (i)-(k) and amendment of Note filed 10-29-98 as an emergency; operative 10-29-98 (Register 98, No. 44). A Certificate of Compliance must be transmitted to OAL by 2-26-99 or emergency language will be repealed by operation of law on the following day.

28. Certificate of Compliance as to 10-29-98 order transmitted to OAL 2-26-99 and filed 4-8-99 (Register 99, No. 15).

29. Amendment of subsections (a), (e), (g), (i) and (j) and amendment of Note filed 11-3-99 as an emergency; operative 11-3-99 (Register 99, No. 45). A Certificate of Compliance must be transmitted to OAL by 3-2-2000 or emergency language will be repealed by operation of law on the following day.

30. Certificate of Compliance as to 11-3-99 order transmitted to OAL 3-1-2000 and filed 4-6-2000 (Register 2000, No. 14).

31. Amendment of subsections (a), (e), (f)-(g), (i) and (j) and amendment of Note filed 11-17-2000 as an emergency; operative 11-17-2000 (Register 2000, No. 46). A Certificate of Compliance must be transmitted to OAL by 3-19-2001 or emergency language will be repealed by operation of law on the following day.

32. Certificate of Compliance as to 11-17-2000 order, including further amendments, transmitted to OAL 3-8-2001 and filed 4-19-2001 (Register 2001, No. 16).

33. Amendment of subsections (a), (e)-(g), (i) and (j) and amendment of Note filed 1-27-2003 as an emergency; operative 8-1-2001 pursuant to Statutes of 2002, Chapter 16, Items 4260-101-0001 and 4260-101-0890 (Register 2003, No. 5). A Certificate of Compliance must be transmitted to OAL by 5-27-2003 or emergency language will be repealed by operation of law on the following day.

34. Amendment of subsections (a), (e)-(g), (i) and (j) and amendment of Note refiled 5-22-2003 as an emergency; operative 5-22-2003 (Register 2003, No. 21). A Certificate of Compliance must be transmitted to OAL by 9-19-2003 or emergency language will be repealed by operation of law on the following day.

35. Certificate of Compliance as to 5-22-2003 order transmitted to OAL 9-18-2003 and filed 10-16-2003 (Register 2003, No. 42).

36. Amendment of section and Note filed 8-24-2005 as a deemed emergency pursuant to Welfare and Institutions Code section 14105(a); operative 8-24-2005 for dates of service 8-1-2002 through 7-31-2003 pursuant to Statutes of 2002, Chapter 379, Items 4260-101-0001 and 4260-101-0890 (Register 2005, No. 34). A Certificate of Compliance must be transmitted to OAL by 12-23-2005 or emergency language will be repealed by operation of law on the following day.

37. Certificate of Compliance as to 8-24-2005 order transmitted to OAL 12-22-2005 and filed 1-23-2006 (Register 2006, No. 4).

38. Amendment of subsections (a)(1), (a)(2)(A), (e)-(f)(5) and (g) and amendment of Note filed 6-24-2010 as an emergency; operative 6-24-2010 (Register 2010, No. 26). A Certificate of Compliance must be transmitted to OAL by 12-21-2010 or emergency language will be repealed by operation of law on the following day.

39. Certificate of Compliance as to 6-24-2010 order, including further amendment of subsections (a)(1), (f)(1) and (f)(6), transmitted to OAL 11-29-2010 and filed 1-10-2011 (Register 2011, No. 2).

40. Amendment of subsections (a)-(a)(2)(A), (e)-(f)(2) and (f)(4)-(5) and amendment of Note filed 12-24-2013 as an emergency; operative 12-24-2013 (Register 2013, No. 52). A Certificate of Compliance must be transmitted to OAL by 6-23-2014 or emergency language will be repealed by operation of law on the following day.

41. Certificate of Compliance as to 12-24-2013 order transmitted to OAL 4-15-2014 and filed 5-22-2014 (Register 2014, No. 21).