1. (1)(a) A portion of total payments to nursing facilities for qualified Medicaid patients is based on a prospective facility case mix rate.

   1. (b) These facilities shall be paid a flat basic operating expense payment. The balance of the total payments will be paid in aggregate to facilities as required by this section based on other authorized factors, including property and behaviorally complex residents, in the proportion that each facility qualifies for the factor.

2. (2) Each quarter, the department shall calculate a new case mix index for each nursing facility. The case mix index is based on three months of MDS assessment data. The case mix index is applied to a new rate at the beginning of a quarter according to the following schedule:

   1. (a) January, February, and March MDS assessments are used for July 1 rates.
   2. (b) April, May, and June MDS assessments are used for October 1 rates.
   3. (c) July, August, and September MDS assessments are used for January 1 rates.
   4. (d) October, November, and December MDS assessments are used for April 1 rates.

3. (3) MDS data is used in calculating each facility's case mix index and upper payment limit gap.

   1. (a) Each facility shall submit MDS data and is responsible for the accuracy of that data.
   2. (b) Each facility shall ensure needed sections of the MDS are completed so that a PDPM or resource utilization group score may be calculated.
   3. (c) The department may exclude inaccurate or incomplete MDS data from a calculation.

4. (4)(a) An MDS assessment for a patient who is eligible for the intensive skilled add-on are excluded from the case mix calculation.

   1. (b) The state average case mix index excludes:

      1. (i) a facility with less than 20% of the facility's total census days as Medicaid fee-for-service paid days, as reported on the facility's FCP or FRV data report; or
      2. (ii) a facility having less than six months of data reported under Rule R414-401.

   2. (c) The state average case mix index is used to set the rate for:

      1. (i) a facility with less than 20% of the facility's total census days as Medicaid fee-for-service paid days, as reported on the facility's FCP or FRV data report; or
      2. (ii) a facility having less than six months of data reported under Rule R414-401.

5. (5)(a) A facility may apply for a special add-on rate for behaviorally complex residents by filing a written request with the Division of Integrated Healthcare (DIH).

   1. (b) The department may approve an add-on rate if an assessment of the acuity and needs of the patient demonstrates that the facility is not adequately reimbursed by the case mix score for that patient. The rate is added on for the specific resident's payment and is not subsumed as part of the facility case mix rate. The Office of Long-Term Services and Supports determines qualification for any additional payment.
   2. (c) DIH shall determine the amount of any add-on.
6. (6) The department pays any property cost separately from the case mix rate.
7. (7) Reimbursement for a nursing home rate is in accordance with Attachment 4.19-D of the Medicaid State Plan, which is incorporated by reference in Section R414-1-5.

8. (8)(a) A provider may challenge the rate set pursuant to this rule using the appeal in Rule R410-14. This applies to which rate methodology is used and to the specifics of implementation of the methodology.

   1. (b) A provider must exhaust administrative remedies before challenging rates in any other forum.
9. (9) The department reimburses swing beds, transitional care unit beds, and small health care facility beds that are used as nursing facility beds, using the prior calendar year statewide average of the daily nursing facility rate.

10. (10) Unless specified otherwise, the department may withhold Title XIX payments from providers if:

    1. (a) there is a shortage in a resident trust account managed by the facility;
    2. (b) the facility fails to submit a complete and accurate FCP, as required by Attachment 4.19-D of the Medicaid State Plan;
    3. (c) the facility fails to submit timely and accurate MDS data;
    4. (d) the facility owes money to DIH because of an overpayment, nursing care facility assessment, civil money penalty, or other offset; or
    5. (e) the facility fails to respond within ten business days to a written request for information.
11. (11) The department shall provide written notice before withholding any payment.

12. (12) When the department rescinds withholding of a payment to a provider, it will, without notice, resume payments according to the regular claims payment cycle.

    1. (a) For ongoing operations, the department shall provide notice before withholding any payment.
    2. (b) The department and provider may negotiate a repayment schedule acceptable to the department for any money owed to the department listed in Subsection R414-504-3(10).
    3. (c) The repayment schedule may not exceed 180 days.
    4. (d) When the department rescinds withholding of a payment to a facility, it will resume payments according to the regular claims payment cycle.

The principles in this section apply to the payment of freestanding and provider-based nursing facilities for services provided to a qualified Medicaid patient. This rule does not affect the system for reimbursement for intensive-skilled Medicaid patient add-on amounts.

KEY: Medicaid

Date of Last Change: July 2, 2025

Notice of Continuation: October 12, 2022

Authorizing, and Implemented or Interpreted Law: 26B-1-213; 26B-3-108