1. (a) Labor costs shall be calculated by combining direct care labor costs, direct care agency costs, indirect care labor costs, and indirect care agency costs.

2. (b) The Department shall calculate the daily direct care labor costs by combining direct care labor costs and direct care agency costs and dividing by total resident days.

   1. (1) The benchmark for the daily direct care labor cost rate component shall be the 90th percentile of each peer group.
   2. (2) The Department shall determine the rate component for each facility either at actual inflated cost or the benchmark for its peer group, whichever is lower.
   3. (3) Each facility's direct care labor costs shall be adjusted by the labor inflation index from the mid-point of the cost reporting period to the mid-point of the rate year.
   4. (4) If a FSSA/NF-B enters into service agreements with unrelated contractors to operate physical therapy, speech pathology, occupational therapy, or respiratory therapy services, the contractor's documented cost of labor to work within the facility shall be included as direct care agency costs. If the facility does not submit to the Department the unrelated contractor's supporting documentation of the contractor's labor costs, all of the purchased service costs shall be included in other non-labor. If the consultant is employed by a related entity, the cost is treated as if it was incurred by the facility.

3. (c) The Department shall calculate the daily indirect care labor costs by combining indirect care labor costs and indirect care agency costs and dividing by total resident days.

   1. (1) If a facility employs a contractor to provide regularly scheduled daily staff needed to operate a facility department (such as plant operations, housekeeping, laundry and linen, or dietary), the contractor's documented labor costs shall be included in the indirect care agency costs. Facilities shall provide the Department with the portion of the contract agreement and other documents that identify the labor costs. If the facility fails to document the portion of the contract cost related to labor, the Department shall determine the indirect labor costs related to the contractor based on the following percentages:

      1. (A) Plant Operations and Maintenance -- 31 percent
      2. (B) Housekeeping -- 85 percent
      3. (C) Laundry and Linen -- 78 percent
      4. (D) Dietary -- 58 percent
   2. (2) The benchmark for the daily indirect care labor cost rate component shall be the 90th percentile of each peer group.
   3. (3) The Department shall determine the rate component for each facility either at actual inflated cost or the benchmark for its peer group, whichever is lower.
   4. (4) Each facility's indirect care labor costs shall be adjusted by the labor inflation index from the mid-point of the cost reporting period to the mid-point of the rate year.

Note: Authority cited: Sections 20, 1324.20, 1324.21 and 1324.23, Health and Safety Code; and Sections 10725, 14105, 14124.5 and 14126.027, Welfare and Institutions Code. Reference: Sections 14105, 14109.5, 14110.1, 14110.6, 14170 and 14171, Welfare and Institutions Code.

History

1. New section filed 7-22-2010 as an emergency; operative 7-22-2010 (Register 2010, No. 30). A Certificate of Compliance must be transmitted to OAL by 1-18-2011 or emergency language will be repealed by operation of law on the following day. Any rules issued by provider bulletin by the Department of Health Care Services that are covered by or inconsistent with these emergency regulations are superseded as of the effective date of these emergency regulations.

2. New section refiled 1-10-2011 as an emergency, including amendment of subsection (a) and repealer of subsection (d); operative 1-18-2011 (Register 2011, No. 2). A Certificate of Compliance must be transmitted to OAL by 4-18-2011 or emergency language will be repealed by operation of law on the following day. Any rules issued by provider bulletin by the Department of Health Care Services that are covered by or inconsistent with these emergency regulations are superseded as of the effective date of these emergency regulations.

3. Certificate of Compliance as to 1-10-2011 order, including amendment of subsections (b)(1)-(2) and (c)(2)-(3), repealer of subsections (b)(3) and (c)(4) and subsection renumbering, transmitted to OAL 4-5-2011 and filed 5-17-2011 (Register 2011, No. 20).