1. (a) A single NF-wide prospective rate shall be paid to each NF and comprised of 5 components of cost determined from NF cost reports submitted to the department.

2. (b) The 5 components of costs shall be:

   1. (1) Administrative costs incurred in the general management and support of the NF, including the following:

      1. a. Compensation for owners, administrators, and consultants;
      2. b. Management fees;
      3. c. Accounting;
      4. d. Legal;
      5. e. Travel; and
      6. f. Other similar costs;

   2. (2) Other support costs allowable in the support group, except for plant maintenance-related costs, including the following:

      1. a. Housekeeping;
      2. b. Laundry;
      3. c. Dietary;
      4. d. Central supply;
      5. e. Pharmacy;
      6. f. Medical records;
      7. g. Social service; and
      8. h. Recreation;

   3. (3) Plant maintenance costs allowable in the support group related to plant maintenance, including but not limited to:

      1. a. Plant maintenance salaries and benefits;
      2. b. Supplies;
      3. c. Utilities; and
      4. d. Property taxes, as well as other plant maintenance costs;
   4. (4) Capital costs, which are depreciation and interest costs that include, but are not limited to, interest on mortgages and long-term notes and depreciation, of which depreciation and interest costs shall not be inflated; and

   5. (5) Patient care costs, which are costs incurred in the direct care of residents treated and include but are not limited to:

      1. a. Salaries of RNs, LPNs, and aides;
      2. b. Nursing supplies;
      3. c. Ancillaries, and
      4. d. Therapy services.
3. (c) Therapy service costs included in (b)(5)d. above shall be subject to a ceiling calculated based on the 85th percentile of the combined physical, occupational, and speech therapy portion of the patient care component of NF rates that were effective October 1, 1998, inflated to August 1, 2006.

4. (d) For each of the components of cost, inflated costs per diem shall be adjusted by a factor to remove costs incurred by residents with atypical needs calculated as follows:

   1. (1) The atypical factor shall be calculated by multiplying the atypical rate in effect by actual atypical days to estimated total atypical costs;
   2. (2) The number of atypical days shall be identified by actual paid claims for atypical individual residents in each NF for the year that corresponds with the NF’s cost report year;
   3. (3) The atypical payments shall then be divided by total medicaid costs for each NF to develop a ratio of atypical costs to total costs; and
   4. (4) Each cost component per diem shall then be reduced by this ratio to remove the costs of treating an atypical resident.

5. (e) Resident acuity shall be classified using the minimum data set (MDS) version 3.0, the Patient Driven Payment Model (PDPM) nursing component, and the current relative weights as follows:

   1. (1) The assessment types used shall be Centers for Medicare & Medicaid Services (CMS) required MDS assessments, which are the omnibus budget reconciliation act and Prospective Payment System (PPS) assessments, including admission, annual, significant change, quarterlies and PPS-only assessments according to the following:

      1. a. The applicable date on the MDS used to determine inclusion shall be the last day of the 5th month prior to the medicaid rate date;
      2. b. These assessments shall be either an admission assessment with a date of entry, item number A1600, on or before the picture date depending on the adjustment period or the most recent quarterly, annual, or significant change assessment with an assessment reference date no later than 5 days past the picture date;
      3. c. To ensure inclusion in the acuity-based rate, an NF shall transmit all applicable assessments on or before the 20th of the month following the picture date, for inclusion in the data collection process; and
      4. d. Each resident shall then be classified into one of the resident classifications, using the PDPM nursing component, and relative weights assigned as described in (3) below;
   2. (2) The PDPM nursing component shall be described as “State of New Hampshire acuity group classifications;” and
   3. (3) Relative weights used for the PDPM shall be the relative weights used in the federal classification system.

6. (f) The NF all-payor case mix index for each NF shall be calculated as follows:

   1. (1) By multiplying the number of residents by the relative weight for each of the classifications; and
   2. (2) Dividing the sum of the values across each resident grouping by the total number of residents.
7. (g) Costs listed in (b)(1), (2), (3), and (5) above shall be calculated by inflating costs in the base year from the midpoint of the cost report to the midpoint of the rate period using the CMS PPS skilled NF input price index by expenses category index.
8. (h) The all-payor case mix index shall be updated to synchronize the all-payor case mix index with the medicaid cost report year.

9. (i) The prospective per diem rates-component amounts shall be calculated as follows:

   1. (1) An NF-specific prospective per diem rate shall be calculated by summing 5 rate components:

      1. a. Patient care costs;
      2. b. Administrative costs;
      3. c. Other support costs;
      4. d. Plant maintenance; and
      5. e. Capital; and

   2. (2) Each component’s per diem amount shall be calculated as follows:

      1. a. The patient care cost component shall be based on:

         1. 1. The lower of each NF’s case-mix adjusted direct care cost per diem amount; or

         2. 2. The statewide median value, as calculated below:

            1. (i) The case mix adjusted direct care cost per diem for each NF shall be calculated by dividing total patient care costs including allowed physical, occupational, and speech therapy costs from each NF’s cost report by resident days, based on data included in the most recently desk reviewed or field audited cost reports, inflated to the midpoint of the rate period in order to provide equity among NFs with cost reports with different year end dates;
            2. (ii) The resulting amount shall then be divided by the all payor case-mix index to determine the case-mix adjusted patient care cost component per diem amount; and
            3. (iii) NF-specific amounts shall be arrayed, and the statewide median determined;

      2. b. The administrative cost component of the prospective per diem rate shall be based on the statewide median value, as calculated below:

         1. 1. NF-specific cost per diem amounts shall be calculated by dividing the total administrative costs by resident days, based on data included in the most recently desk reviewed or field audited cost reports, inflated to the midpoint of the rate period in order to provide equity among NFs with cost reports with different year end dates; and
         2. 2. NF-specific amounts shall be arrayed, and the statewide median value determined;

      3. c. The other support cost component of the prospective per diem rate shall be based on the statewide median value, as calculated below:

         1. 1. NF-specific cost per diem amounts shall be calculated by dividing the total other support costs by resident days, based on data included in the most recently desk reviewed or field audited cost reports, inflated to the midpoint of the rate period, in order to provide equity among NFs with cost reports with different year end dates; and
         2. 2. NF-specific amounts shall be arrayed, and the statewide median value determined;

      4. d. The plant maintenance component of the prospective per diem rate shall be based on the statewide median value, as calculated below:

         1. 1. NF-specific cost per diem amounts shall be calculated by dividing the total plant maintenance costs by resident days, based on data included in the most recently desk reviewed or field audited cost reports, inflated to the midpoint of the rate period in order to provide equity among NFs with cost reports with different year end dates; and
         2. 2. NF-specific amounts shall be arrayed, and the statewide median value determined; and
      5. e. The capital cost component of the prospective per diem rate shall be based on the actual NF cost, taken from the most recently desk reviewed or field audited cost reports, subject to an aggregate 85th percentile ceiling.
10. (j) In addition to the requirements in (i)(2)a. above, the department shall conduct a review of acuity-based rates at least every 6 months, using the most recently available MDS data submitted by the facilities after review validation.

11. (k) NF-specific per diem rates shall be calculated as follows:

    1. (1) The per diem cost components shall be summed to obtain the total NF rate per diem for each resident in the NF as of a date specified by the department;
    2. (2) The resulting rate shall be paid to the NF until rates are updated with new MDS data after the update to acuity-based rates pursuant to (j) above, at which time the rates for all residents are summed and divided by the total number of residents in the NF; and
    3. (3) These rates shall be reduced by a budget adjustment factor equal to 25% in accordance with the medicaid state plan.
12. (l) The department shall review rates and rebase NF rates at least every 5 years.

Source. #8547, eff 1-24-06 (formerly He-W 593.04); ss by #8769, EMERGENCY RULE, eff 12-1-06, EXPIRES: .5-30-07; ss by #8890, eff 5-25-07; ss by #9623, eff 12-24-09; paras. (e) & (f) amd by #12220, eff 7-1-17; paras. (a)-(d) & (g)-(o) amd by #12440, INTERIM, eff 12-23-17, EXPIRED: 6-21-18 in paras (a)-(d) & (g)-(o); paras (a)-(d) & (g)-(p) amd by #12566, eff 6-29-18; amd by #12688, EMERGENCY RULE, eff 12-7-18, EXPIRED: 6-5-19 (para (k) in #12566 effective again pursuant to RSA 541-A:18, V, I; ss by #14020, eff 7-10-24; ss by #14149, eff 12-12-24