(a) The rate of payment shall consist of an operating cost per diem and a capital cost per diem, computed from allowable costs and subject to cost category standards. The rate year shall be the 12-month period from July 1st through June 30th. The rate of payment effective July 1, 1995 through June 30, 1996 shall be a continuance of the rate of payment effective July 1, 1994 through June 30, 1995. The rate of payment effective July 1, 2011 through June 30, 2012, and July 1, 2012 through June 30, 2013, shall be a continuance of the rate of payment in effect on June 30, 2011, except to the extent necessary to adjust such payments pursuant to the provisions of section 578.14(o) of this Part.

1. (1) Allowable costs shall be determined from the cost report as submitted pursuant to section 578.5 of this Part for the base year which is the fiscal year two years prior to the rate year, and are subject to principles of reimbursement pursuant to section 578.14 of this Part. The commissioner may determine that a provider has inadequate cost experience for the base year and may select an alternate cost report period, in which case the costs will be adjusted to reflect the costs in the base year.

2. (2) Cost category standards (i.e., screens or the maximum amount that will be reimbursed for a specific expense or group of expenses) shall be considered when calculating the total reimbursable costs to be included in the operating component for reimbursable services for residential treatment facilities.

   1. (i) A cost category standard shall be determined for combined administration, support and maintenance services. Reimbursable cost per diem shall be the lesser of the standard or the allowable administrative, support and maintenance cost per diem. The administration, support and maintenance services standard is computed separately for upstate and downstate facilities. The standard is computed from the base year using a combination of 50 percent of the average allowed per diem cost for the applicable region and 50 percent of the statewide average per diem cost, plus seven and one-half percent.
   2. (ii) The reimbursable costs for the medical/clinical services including nursing, shall be the lesser of the allowable costs reported on the base year cost report or the medical/clinical screen multiplied by the FTE standard, as determined by the commissioner. The medical/clinical screen is computed separately for upstate and downstate facilities. The screen is computed from the base year using a combination of 50 percent of the average allowed per diem cost for the applicable region and 50 percent of the statewide average per diem cost, plus seven and one-half percent.
   3. (iii) Downstate facilities are defined as those facilities in the following counties: Bronx, Kings, New York, Putnam, Queens, Richmond, Rockland, Westchester, Nassau and Suffolk. Upstate facilities are all those facilities located in the remaining counties of New York State.
3. (3) The purchase of health services category shall include all allowable costs pursuant to section 578.14 of this Part as defined pursuant to section 584.11(d) of this Title. The services allowable in the purchase of health services category shall be approved by the commissioner.
4. (4) The allowable costs, as set forth in paragraph (1) of this subdivision, that meet the requirements stated in paragraphs (2) and (3) of this subdivision, shall be trended by the applicable Medicare inflation factor for hospitals and units excluded from the prospective payment system except for the rate periods effective July 1, 1996 through June 30, 1997, and July 1, 2009 through June 30, 2010, where the inflation factor used to trend costs will be limited to the inflation factor for the first year of the two-year period. No trend shall be applied to allowable costs for the rate period effective July 1, 2013 through June 30, 2014, and July 1, 2014 through December 31, 2014.
5. (5) The capital cost per diem shall be determined from the base year cost report as submitted pursuant to section 578.5 of this Part, and subject to the principles of reimbursement pursuant to section 578.14 of this Part.