(b) An initial statewide episodic base price, to be effective May 2, 2012, will be calculated based on paid Medicaid claims, as determined by the department, for services provided by all certified home health agencies in New York State during the base period of January 1, 2009 through December 31,2009.

1. (1) Such base price shall be calculated by grouping all Medicaid paid CHHA claims for dates of services in 2009 into 60 day episodes of care. All such 2009 episodes which include dates of service beginning in November or December of 2008 or ending in January or February of 2010 shall be included in such base price calculation. Low utilization episodes of care, as defined in subdivision (d) of this section, shall be excluded from such calculation. With regard to high utilization episodes of care, costs in excess of outlier thresholds, as determined in accordance with subdivision (e) of this section, shall be excluded from such calculation. The resulting base price shall be subject to such further adjustment as is required to comply with the aggregate savings mandated by paragraph (b) of subdivision (13) of section 3614 of the Public Health Law (PHL).
2. (2) The episodic base price for periods beginning on or after April 1, 2013, may be based on paid Medicaid claims for services provided by all certified home health agencies during a base year period subsequent to 2009, as determined by the department.
3. (3) The applicable base year for determining the base price shall be updated not less frequently than every three years.

(d) Notwithstanding any inconsistent provision of this section, payments for low utilization cases shall be based on the statewide weighted average of fee-for-service rates for such services, as determined by the department and as adjusted by the applicable regional wage index factor as described in subdivision (h) of this section. For purposes of this section, low utilization cases will be defined as 60 day episodes of care with a total cost of $500 or less, based on statewide weighted average fee-for-service rates paid on a per-visit, per-hour, or other appropriate historical basis.

1. (1) Payments for 60-day episodes of care shall be adjusted for high-utilization cases in which total costs, based on statewide weighted average fee-for-service rates as determined by the department and as paid on a per-visit, per-hour, or other appropriate historical basis, exceed outlier cost thresholds determined by the department for each case mix group. In such cases the provider will receive the adjusted episodic base payment pursuant to subdivisions (b) and (c) of this section, plus a percentage, to be determined by the department, of the cost which exceeds the outlier threshold, as adjusted by the regional wage index factor, provided, however, that such adjustment percentage is subject to such further adjustment as may be necessary to comply with the aggregate savings mandated by PHL section 3614(13)(b).
2. (2) The outlier threshold for each resource group, as described in subdivision (f) of this section, shall be equal to a specified percentile of all episodic claims totals for the resource group during the base period, excluding low utilization episodes. Such percentiles shall range from the 70th percentile for groups with the lowest case mix index to the 90th percentile for groups with the highest case mix index.

(e)

(h) The regional wage index factor (WIF) shall be computed in accordance with the following and applied to the portion of the episodic base price attributable to labor costs:

1. (1) Average wages shall be determined for agency health care service occupations for each of the 10 labor market regions in New York, as defined by the New York State Department of Labor.
2. (2) The average wages in each region shall be assigned relative weights in proportion to the Medicaid utilization for each of the agency service categories as reported in the most recently available agency cost report submissions.
3. (3) Based on the average wages as determined pursuant to paragraph (1) of this subdivision, as weighted pursuant to paragraph (2) of this subdivision, an index shall be determined for each region, based on a comparison of the weighted average regional wages to the statewide average wages.
4. (4) The department may adjust the regional WIFs proportionately, if necessary, to assure that the application of the WIFs is revenue-neutral on a statewide basis.

(i) Payments for episodes of care shall be proportionally reduced to reflect episodes of care totaling less than 60 days, provided, however, that CHHAs providing episodes of care totaling less than 60 days as a result of the following circumstances shall be reimbursed for a full 60 day episode:

1. (1) discharges from the CHHA resulting from a determination that the patient no longer requires CHHA care and may remain at home;
2. (2) transfer to a general hospital to receive acute care services;
3. (3) transfer to a hospice for end-of-life care; or

4. (4) the patient's death.

   The commissioner shall monitor cases for which full payments are made for episodes of care of less than 60 days pursuant to the provisions of this subdivision and may require the CHHA to provide such information and documentation as the commissioner deems necessary to ensure quality of care.

(j) The department may require agencies to collect and submit any data deemed by the department to be required to implement the provisions of this section.

1. (1) The commissioner may grant approval of a temporary adjustment to rates calculated pursuant to this section for eligible certified home health agencies.

2. (2) Eligible certified home health agency providers shall include:

   1. (i) providers undergoing closure;
   2. (ii) providers impacted by the closure of other health care providers;
   3. (iii) providers subject to mergers, acquisitions, consolidations or restructuring; or
   4. (iv) providers impacted by the merger, acquisition, consolidation or restructuring of other health care facilities.

3. (3) Providers seeking rate adjustments under this subdivision shall demonstrate through submission of a written proposal to the commissioner that the additional resources provided by a temporary rate adjustment will achieve one or more of the following:

   1. (i) protect or enhance access to care;
   2. (ii) protect or enhance quality of care;
   3. (iii) improve the cost effectiveness of the delivery of health care services; or

   4. (iv) otherwise protector enhance the health care delivery system, as determined by the commissioner.

      (4)

   5. (i) Such written proposal shall be submitted to the commissioner at least 60 days prior to the requested effective date of the temporary rate adjustment and shall include a proposed budget to achieve the goals of the proposal. Any temporary rate adjustment issued pursuant to this subdivision shall be in effect for a specified period of time as determined by the commissioner, of up to three years. At the end of the specified timeframe, the provider shall be reimbursed in accordance with the otherwise applicable rate-setting methodology as set forth in applicable statutes and applicable provisions of this Subpart. The commissioner may establish, as a condition of receiving such a temporary rate adjustment, benchmarks and goals to be achieved in conformity with the provider’s written proposal as approved by the commissioner and may also require that the provider submit such periodic reports concerning the achievement of such benchmarks and goals as the commissioner deems necessary. Failure to achieve satisfactory progress, as determined by the commissioner, in accomplishing such benchmarks and goals shall be a basis for ending the provider’s temporary rate adjustment prior to the end of the specified timeframe.
   6. (ii) The commissioner may require that applications submitted pursuant to this section be submitted in response to and in accordance with a request for applications or a request for proposals issued by the commissioner.

(k) Closures, mergers, acquisitions, consolidations, and restructurings.