6501 REIMBURSEMENT OF NURSING FACILITIES

6501.1 Each nursing facility shall be reimbursed on a prospective basis at a facility-specific per diem rate for all services provided, except prescription drugs. The facility-specific per diem rate shall be developed by establishing a base year per diem rate for each facility, subject to a ceiling, adjusted semi-annually for case mix and subject to other adjustments. A facility may also receive an add-on payment for each resident receiving ventilator care pursuant to the requirements set forth in sections 6509 through 6511.

6501.2 The base year costs for each free-standing nursing facility shall be calculated using actual audited allowable costs for the nursing facility's fiscal year that ends on or after January 1, 2000, but no later than December 31, 2000.

6501.3 The base year costs for each hospital-based nursing facility shall be calculated using actual audited allowable costs for the nursing facility's fiscal year that ends on or after January 1, 1999, but no later than January 31, 1999.

6501.4 Except for depreciation, amortization and interest on capital-related expenditures, the base year costs for each nursing facility shall be adjusted to October 1, 2000 using the Centers for Medicare and Medicaid Services (CMS) Prospective Payment System Skilled Nursing Facility Input Price Index.

6501.5 The base year per diem rate for each facility is based on its audited allowable base year costs and shall be developed using three (3) cost categories: routine and support expenditures; nursing and resident care expenditures; and capital related expenditures:

6501.6 Routine and support expenditures shall include expenditures for:

(a) Dietary items, except raw food;

(b) Laundry and linen;

(c) Housekeeping;

(d) Plant operations and related clerical support;

(e) Volunteer Services;

(f) Administrative and general salaries;

(g) Professional services - non-healthcare related;

(h) Non-capital related insurance;

(i) Travel and entertainment;

(j) General and administrative costs;

(k) Non-capital related interest expense; and

(l) Other miscellaneous expenses as noted on the cost report submitted pursuant to section 6518.

6501.7 Nursing and resident care costs shall include the costs of:

(a) Raw food;

(b) Nursing and physician services and their related clerical support services;

(c) Non-prescription drugs and pharmacy consultant services;

(d) Medical supplies;

(e) Laboratory services;

(f) Radiology services;

(g) Physical, speech and occupational therapy;

(h) Social services;

(i) Resident activities;

(j) Respiratory therapy;

(k) Oxygen therapy; and

(l) Utilization and medical review.

6501.8 Capital related costs shall include the costs of

(a) Equipment rental;

(b) Depreciation and amortization;

(c) Interest on capital debt;

(d) Facility rental;

(e) Real-estate taxes and capital related insurance;

(f) Property insurance; and

(g) Other capital-related expenses.

6501.9 The total base year per diem for a facility for each Medicaid resident day shall be the sum of:

(a) the nursing and resident care costs per diem, subject to a ceiling and adjusted semi-annually for case mix;

(b) the routine and support costs per diem, subject to a ceiling;

(c) any incentive payment; and

(d) capital related costs per diem.

6501.10 Provider tax expenses shall not be included in calculating the base year costs.

6501.11 The costs attributable to paid feeding assistants provided in accordance with the requirements set forth in 42 CFR Parts 483 and 488 shall be included in nursing and resident care costs for base years beginning on or after October 27, 2003.

SOURCE: Final Rulemaking published at 53 DCR 1370 (February 24, 2006).