N.Y. Comp. Codes R. & Regs. tit. 10, § 86-2.15 – Rates for residential health care facilities without adequate cost experience.

(1) This subdivision shall apply where the fiscal and statistical data of the facility are unavailable through no fault of the provider or its agents, and due to circumstances beyond its control, or when there is a new facility without adequate cost experience as set forth in section 86-2.2(e) of this Subpart.
(2) The appointment of a receiver or the establishment of a new operator for an ongoing facility shall not be considered a new facility for the purposes of this section. Reimbursement for such receiver or new operator shall be in accordance with sections 86-2.10 and 86-2.11 of this Subpart.
(b) The rates certified for such residential health care facilities as set forth in subdivision (a) of this section, shall be determined in accordance with the following:
1. (1) Except as identified in paragraphs (5), (6) and (7) of this subdivision, for the first three months of operation, the direct component of the rate shall be equivalent to the statewide mean direct case mix neutral cost per day after application of the RDIPAF as determined pursuant to section 86-2.10 of this Subpart. The facility shall perform an assessment of all patients, pursuant to section 86-2.30 of this Subpart, at the beginning of the fourth month of operation and at the beginning of each third month thereafter until the end of the 12-month cost report period referred to in section 86-2.2(e) of this Subpart or if applicable, the six-month cost report period identified in subdivision (e) of this section. The direct component of the rate shall be adjusted pursuant to section 86-2.10 of this Subpart, effective the first day of the month of each assessment period, based on the facility's case mix.
2. (2) Except as identified in paragraphs (5), (6) and (7) of this subdivision, for the first three months of operation, the indirect component of the rate shall be equivalent to a blended mean price for the applicable affiliation group as identified in section 86-2.10(d) of this Subpart. The blended mean price shall be established using a proportion of 60 residents in the high case mix index peer group and 40 residents in the low case mix index peer group both as identified in section 86-2.10(d) of this Subpart, adjusted by the RIIPAF. Effective on the first day of the fourth month, the indirect component shall be the mean price determined using the facility's PRI's and adjusted by the RIIPAF.
3. (3) The noncomparable component of the rate shall be determined on the basis of the generally applicable factors, including but not limited to the following:
  1. (i) satisfactory cost projections:
  2. (ii) allowable actual expenditures; and
  3. (iii) an anticipated average utilization of no less than 90 percent.
4. (4) Rates established pursuant to this subdivision shall also include an adjustment pursuant to section 86-2.10(u) of this Subpart.
5. (5) Acquired Immune Deficiency Syndrome (AIDS). Except as identified in subparagraph (v) of this paragraph, a facility which is approved as a distinct AIDS facility or has a discrete AIDS unit pursuant to Part 710 of this Title, shall have rates established pursuant to this subdivision as follows:
  1. (i) The direct component of the rate shall be determined in accordance with paragraph (1) of this subdivision provided, however, that the direct mean rate for the first three months of operation shall be determined pursuant to an approved facility's projection of case mix. The direct component of the rate shall be enhanced by an increment which shall be determined on the basis of the difference between budgeted costs of care and staffing levels for AIDS patients in specific patient classification groups and the costs of care and staffing levels for non-AIDS patients which are classified in the same patient classification groups based on data submitted by a facility. The increment to be included in the facility's rate pursuant to this subparagraph shall be approved by the commissioner, but in no event shall the increment be greater than 1.0. The direct component of the rate shall also be increased by an occupancy factor of 1.225.
  2. (ii) The indirect component shall be determined in accordance with paragraph (2) of this subdivision provided, however, that the indirect mean price for the first three months of operation shall be determined pursuant to an approved facility's projection of case mix. The indirect component of the rate shall be increased by the AIDS factor as determined pursuant to section 86-2.10(p) of this Subpart.
  3. (iii) The allowable costs for the central service supply functional cost center as listed in section 86-2.10(c)(1) of this Subpart shall be considered a noncomparable cost.
  4. (iv) Rates developed pursuant to this paragraph shall remain in effect until a facility submits 12-month financial and statistical data pursuant to section 86-2.2(e) of this Subpart.
  5. (v) Notwithstanding the provisions of subparagraphs (i), (ii) and (iii) of this paragraph, any facility which prior to April 1, 1991 has a rate approved and certified by the commissioner pursuant to section 2807 of the Public Health Law, which includes AIDS specific adjustments pursuant to this Subpart, or has been approved as an AIDS specific facility by the Public Health Council, and/or has had a certificate of need application approved or conditionally approved pursuant to Part 710 of this Title for the operation of a discrete AIDS unit shall have its rate determined in accordance with the following:
    1. (a) The direct component of the rate shall be based on the statewide ceiling direct case mix neutral cost per day after application of the RDIPAF as determined pursuant to section 86-2.10 of this Subpart and a case mix proxy for AIDS patients established by this subparagraph, and increased by an occupancy factor of 1.225. The case mix proxy for AIDS patients shall be determined as follows:
      1. (1) A facility which was approved based on a written application for establishment and/or construction which indicated that a majority of its AIDS patients would fall into patient classification groups with a case mix index exceeding 0.83 prior to application of any AIDS factors or increments identified in this subdivision shall be assigned a case mix proxy as determined by the following:
        (i) For its first three months of operation, the facility shall be assigned a case mix proxy of 2.32.
        (ii) Beginning with the start of the fourth month of operation, and pursuant to the facility's performance of patient assessments referred to in paragraph (b)(1) of of this section, an AIDS patient shall be assigned a case mix proxy based on the sum of responses to section III - Activities of Daily Living (ADL's), questions 19, 21, and 22 of the patient review instrument (PRI) as contained in section 86-2.30(i) of this Subpart as follows:
        ADL TOTAL CASE MIX PROXY
        3-6 2.18
        7-8 2.32
        9 2.64
      2. (2) A facility which was approved based on a written application for establishment and/or construction which indicated a majority of its AIDS patients would fall into patient classification groups with a case mix index equal to or less than 0.83 prior to application of any AIDS factors or increments identified in this subdivision shall have a case mix proxy equal to 1.55. This case mix proxy shall remain in effect until a facility submits financial and statistical data pursuant to section 86-2.2(e) of this Subpart.
        (i) The indirect component of the rate for facilities identified in subclause (1) of this clause shall be equivalent to the indirect ceiling price per day of the high intensity peer group established pursuant to section 86-2.10(d)(2) of this Subpart after application of the RIIPAF as determined pursuant to section 86-2.10 of this Subpart and increased by the indirect AIDS factor as determined pursuant to section 86-2.10(p) of this Subpart.
        (ii) The indirect component of the rate for facilities identified in subclause (2) of this clause shall be equivalent to the ceiling indirect price per day of the low intensity peer group established pursuant to section 86-2.10(d)(2) of this Subpart after application of the RIIPAF as determined pursuant to section 86-2.10 of this Subpart and increased by the indirect AIDS factor as determined pursuant to section 86-2.10(p) of this Subpart.
        (3)
      3. (4) For purposes of this subparagraph, the allowable costs for the central service supply functional cost center as listed in section 86-2.10(c)(1) shall be considered a noncomparable cost.
      4. (5) Rates developed pursuant to this subparagraph shall remain in effect until a facility submits financial and statistical data pursuant to section 86-2.2(e) of this Subpart.
6. (6) Long-term inpatient rehabilitation program for traumatic brain-injured residents (TBI). A facility which is approved to operate discrete units for the care of residents under the long-term inpatient rehabilitation program for TBI patients established pursuant to section 415.36 of this Title shall have separate and distinct payment rates established pursuant to this subdivision as follows:
  1. (i) For the first three months of operation, the direct component shall be equivalent to the statewide mean direct case mix neutral cost per day established pursuant to subparagraph (c)(3)(iii) of section 86-2.10 of this Subpart increased by a factor of 3.28 and adjusted by the RDIPAF pursuant to section 86-2.10 of this Subpart. The direct component shall be further increased by an occupancy factor of 1.225 for the first six months of operation. The facility shall perform an assessment of all residents, pursuant to section 86-2.30 of this Subpart, at the beginning of the fourth month of operation and at the beginning of each third month for the period set forth in paragraph (1) of this subdivision. Effective on the first day of the month of each assessment period, the direct component of the rate shall be adjusted pursuant to section 86-2.10(c) of this Subpart based on the facility's case mix. The case mix index which is used to establish the facility specific mean direct price per day for each patient classification group pursuant to section 86-2.10(c)(4) of this Subpart for TBI residents shall be increased by an increment of 1.49.
  2. (ii) The indirect component of the rate shall be equivalent to the mean indirect price developed pursuant to section 86-2.10(d) of this Subpart for the applicable peer group established for high intensity case mix identified in section 86-2.10(d)(2) of this Subpart, adjusted by the RIIPAF pursuant to section 86-2.10(d) of this Subpart. The indirect component shall be further adjusted by an occupancy factor of 1.225 for the first six months of operation.
  3. (iii) The noncomparable component of the rate shall be determined as follows:
    1. (a) For an existing facility that opens a discrete unit for the care of patients under the long-term inpatient rehabilitation program for TBI patients, the noncomparable component of the rate shall be equal to the noncomparable component of the existing residential health care facility's rate computed pursuant to section 86-2.10(f) of this Subpart plus approved budgeted costs for personnel required by section 415.36 of this Title that would be reported in the functional cost centers identified in section 86-2.10(f) of this Subpart.
    2. (b) For a new facility without a residential health care facility rate computed pursuant to section 86-2.10 of this Subpart, the noncomparable component of the rate shall be determined in accordance with paragraph (3) of this subdivision.
  4. (iv) Rates established pursuant to this paragraph shall also include an adjustment pursuant to section 86-2.10(u) of this Subpart.
7. (7) Long-term ventilator dependent residents. A facility which is approved to operate discrete units for the care of long-term ventilator dependent patients as established pursuant to section 415.38 of this Title shall have separate and distinct payment rates established pursuant to this subdivision as follows:
  1. (i) For the first three months of operation, the direct component shall be equivalent to the statewide mean direct case mix neutral cost per day established pursuant to section 86-2.10(c)(3)(iii) of this Subpart increased by a factor of 2.89 and adjusted by the RDIPAF pursuant to section 86-2.10 of this Subpart. The direct component shall be further increased by an occupancy factor of 1.225 for the first six months of operation. The facility shall perform an assessment of all residents, pursuant to section 86-2.30 of this Subpart, at the beginning of the fourth month of operation and at the beginning of each third month for the period set forth in paragraph (1) of this subdivision. Effective on the first day of the month of each assessment period, the direct component of the rate shall be adjusted pursuant to section 86-2.10(c) of this Subpart based on the facility's case mix. The case mix index which is used to establish the facility specific mean direct price per day for each patient classification group pursuant to section 86-2.10(c)(4) of this Subpart for long-term ventilator dependent residents shall be increased by an increment of 1.15.
  2. (ii) The indirect component of the rate shall be equivalent to the mean indirect price developed pursuant to section 86-2.10(d) of this Subpart for the applicable peer group established for high intensity case mix identified in section 86-2.10(d)(2) of this Subpart, adjusted by the RIIPAF pursuant to section 86-2.10(d) of this Subpart. The indirect component shall be further adjusted by an occupancy factor of 1.225 for the first six months of operation.
  3. (iii) The noncomparable component of the rate shall be determined as follows:
    1. (a) For an existing facility that is approved to operate discrete units for the care of long-term ventilator residents, the noncomparable component of the rate shall be equal to the noncomparable component of the existing residential health care facility's rate computed pursuant to section 86-2.10(f) of this Subpart plus approved budgeted costs as identified in clauses (c) and (d) of this subparagraph plus approved budgeted costs for personnel required by section 415.38 of this Title that would be reported in the functional cost centers identified in section 86-2.10(f) of this Subpart.
    2. (b) For a new facility without a residential health care rate computed pursuant to section 86-2.10 of this Subpart, the noncomparable component of the rate shall be determined in accordance with paragraph (3) of this subdivision and include approved budgeted costs identified in clauses (c) and (d) of this subparagraph.
    3. (c) The approved budgeted costs for the central service supply functional cost center as listed in section 86-2.10(c)(1) of this Subpart shall be considered a noncomparable cost reimbursed pursuant to section 86-2.10(f) of this Subpart.
    4. (d) The approved budgeted costs for prescription drugs, specifically required by generally accepted standards of professional practice for long-term ventilator dependent residents, that are administered at a frequency and volume exceeding those of prescription drugs included in the direct component of the rate pursuant to subdivision (c) of this section shall be considered a noncomparable cost pursuant to section 86-2.10(f) of tis Subpart.
  4. (iv) Rates established pursuant to this paragraph shall also include an adjustment pursuant to section 86-2.10(u) of this Subpart.
8. (8) Specialized programs for residents requiring behavioral interventions. A facility which is approved to operate discrete units specifically designated for the purpose of providing specialized programs for residents requiring behavioral interventions as established pursuant to section 415.39 of this Title shall have separate and distinct payment rates established pursuant to this subdivision as follows:
  1. (i) For the first three months of operation, the direct component shall be equivalent to the statewide mean direct case mix neutral cost per day established pursuant to section 86-2.10(c)(3)(iii) of this Subpart increased by a factor of 2.65 and adjusted by the RDIPAF pursuant to section 86-2.10 of this Subpart. The direct component shall be further increased by an occupancy factor of 1.225 for the first six months of operation. The facility shall perform an assessment of all residents, pursuant to section 86-2.30 of this Subpart, at the beginning of the fourth month of operation and at the beginning of each third month for the period set forth in paragraph (1) of this subdivision. Effective on the first day of the month of each assessment period, the direct component of the rate shall be adjusted pursuant to section 86-2.10(c) of this Subpart based on the facility's case mix. The case mix index which is used to establish the facility specific mean direct price per day for each patient classification group pursuant to section 86-2.10(c)(4) of this Subpart for residents requiring behavioral interventions shall be increased by an increment of 1.40.
  2. (ii) The indirect component of the rate shall be equivalent to the mean indirect price developed pursuant to section 86-2.10(d) of this Subpart for the applicable peer group established for high intensity case mix identified in section 86-2.10(d)(2) of this Subpart, adjusted by the RIIPAF pursuant to section 86-2.10(d) of this Subpart. The indirect component shall be further adjusted by an occupancy factor of 1.225 for the first six months of operation.
  3. (iii) The noncomparable component of the rate shall be determined as follows:
    1. (a) For an existing facility that is approved to operate discrete units specifically designed for the purpose of providing specialized programs for residents requiring behavioral interventions, the noncomparable component of the rate shall be equal to the noncomparable component of the existing residential health care facility's rate computed pursuant to section 86-2.10(f) of this Subpart plus approved budgeted costs for personnel required by section 415.39 of this Title that would be reported in the functional cost centers identified in section 86-2.10(f) of this Subpart.
    2. (b) For a new facility without a residential health care rate computed pursuant to section 86-2.10 of this Subpart, the noncomparable component of the rate shall be determined in accordance with paragraph (3) of this subdivision.
  4. (iv) Rates established pursuant to this paragraph shall also include an adjustment pursuant to section 86-2.10(u) of this Subpart.
(c) The rates developed pursuant to this section shall remain in effect until a facility submits a 12-month cost report in accordance with section 86-2.2(e) of this Subpart for a 12-month period during which the facility had an overall average utilization of at least 90 percent of bed capacity. This cost report shall be used to adjust the direct, indirect, noncomparable and capital components of the rate effective on the first day of the cost report period.
(d) All rates of reimbursement certified pursuant to this section shall be subject to audit pursuant to section 86-2.7 of this Subpart. After audit, the facility shall receive a rate based upon actual allowable costs incurred during the rate period, and computed in accordance with section 86-2.10 of this Subpart. Except as described in section 86-2.19(d)(2) of this Subpart, an occupancy rate of not less than 90 percent shall be used when calculating the capital and noncomparable components in the rate calculation.
(e) Notwithstanding the provisions of this section, an operator of a facility which has had an overall average utilization of at least 90 percent of bed capacity for a six-month period which began prior to April 1, 1993 but after the date on which the operator began operations shall submit a six-month cost report for that period. Such six-month cost report shall be utilized for purposes of this section in lieu of the 12-month cost report identified in section 86-2.2(e) of this Subpart.

ADL TOTAL	CASE MIX PROXY
3-6	2.18
7-8	2.32
9	2.64

(a)