Original Notice.

Preproposal statement of inquiry was filed as WSR 99-12-029.

Title of Rule: WAC 388-96-779, 388-96-780, 388-96-781, 388-96-782, and 388-96-901, nursing facility Medicaid payment system.

Purpose: To implement two Medicaid nursing facility payment programs required by RCW 74.46.508.

Statutory Authority for Adoption: RCW 74.46.800.

Statute Being Implemented: RCW 74.46.508.

Summary: The proposed rules establish criteria for nursing facilities and for Medicaid-eligible nursing facility residents, in order to make enhanced payments for those residents with unmet exceptional care and therapy needs.

Reasons Supporting Proposal: Will comply with state statutory directives adopted in 1999 and will allow more effective care of Medicaid residents with special care and therapy needs.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Patricia Hague, Office of Rates Management, P.O. Box 45819, Olympia, WA 98504-5819, (360) 753-0631.

Name of Proponent: Department of Social and Health Services.

Agency Comments or Recommendations, if any, as to Statutory Language, Implementation, Enforcement, and Fiscal Matters: Make sections shorter for readability.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: These rules implement RCW 74.46.508 and establish criteria for participating nursing facilities and Medicaid residents to receive enhanced payments for unmet exceptional direct care or therapy care needs. It is anticipated the enhanced payments will allow for more intensive care and therapy services leading to significant progress in functional rehabilitation.

Proposal Changes the Following Existing Rules: The proposal amends WAC 388-96-901 to exclude departmental actions taken under the exceptional care and exceptional therapy programs from administrative review and appeal.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposal will impose no new costs on nursing facilities. Participation is voluntary and the programs will increase revenue to participating facilities.

RCW 34.05.328 does not apply to this rule adoption. Proposal qualifies as a significant legislative rule; however, it is exempt from the requirements of RCW 34.05.328 under subsection (5)(b)(vi) (rules that set or adjust fees or rates pursuant to legislative standards).

Hearing Location: Lacey Government Center (behind Tokyo Bento Restaurant), 1009 College Street S.E., Room 104-B, Lacey, WA 98503, on May 23, 2000, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Paige Wall by May 12, 2000, phone (360) 664-6094, TTY (360) 664-6178, e-mail wallpg@dshs.wa.gov.

Submit Written Comments to: Identify WAC Numbers, Paige Wall, Rules Coordinator, Rules and Policies Assistance Unit, P.O. Box 45850, Olympia, WA 98504-5850, fax (360) 664-6185, by May 23, 2000.

Date of Intended Adoption: May 24, 2000.

April 14, 2000

Marie Myerchin-Redifer, Manager

Rules and Policies Assistance Unit

(1) The department will designate a maximum of twelve nursing facilities (NF) that have demonstrated excellence in therapy care. A designated NF may request payment for exceptional therapy care provided to individual NF facility Medicaid residents that meet the criteria in WAC 388-96-780.

(2) A NF requesting exceptional therapy care payments will submit a written request to the department separate from all other requests and inquiries of the department. The NF must document by providing quantitative and narrative data that demonstrates the NF's history of providing specialized rehabilitation therapy to its residents. A complete written request will include documentation that the NF:

(a) Analyzes its effectiveness at providing rehabilitative therapy by comparing changes in resident outcome measures between admission, transition, and/or discharge status for residents;

(b) Assures that residents served make measurable improvement toward accomplishment of functional goals and that the program uses measurable criteria for initiation and termination of specific rehabilitation treatment;

(c) Has substantial experience in serving residents who are under age sixty-five, not eligible for Medicare, and able to achieve significant progress in functional status when provided with intensive therapy care services;

(d) Provides treatment to a sufficient volume of residents to ensure an environment of peer support for residents;

(e) Utilizes a medical rehabilitation case management system; and

(f) Provides or arranges for the following rehabilitation services with staff who are licensed, registered, or certified, and who are in-house or available for treatment every day when indicated in the rehabilitation plan:

(i) Occupational therapy;

(ii) Physical therapy;

(iii) Speech/language pathology; and

(iv) Mental health that may include:

(A) Neuropsychological services;

(B) Clinical psychological services, including testing and counseling; and

(C) Substance abuse counseling.

(3) If the NF is accredited by the commission on accreditation of rehabilitation facilities (CARF), the NF will provide documentation detailing current accreditation status. If the NF has been CARF accredited but accreditation status was lost, the NF will provide documentation detailing the findings that led to the change in accreditation status.

(4) The criteria that the department will use to evaluate the request may include, but is not limited to, a review of the NF's:

(a) Current licensure and certification status;

(b) Compliance history with state and federal regulations, including a review of whether substandard care is identified;

(c) Overall financial status;

(d) Findings of Medicare/Medicaid fraud against a NF licensee to include individuals, partnerships, corporations, or other legal entities licensed to operate the nursing home; and

(e) Geographic distribution related to other NF's providing demonstrated excellence in therapy care.

(5) If the initial written request is incomplete, the department will notify the NF of the documentation and information required within thirty calendar days of receipt of the initial application. The NF will submit the requested information within fifteen calendar days from the date that the NF receives the notice to provide the information. If the NF fails to complete the request by providing all the requested documentation and information within fifteen calendar days from the date of receipt of notification, the department will deny the request.

(6) Within sixty calendar days after receipt of a complete designation request, the department will respond to a NF in writing.

(7) The department will conduct monitoring and analysis of the components listed in subsection (4) of this section for any NF receiving exceptional therapy care rates. The NF will lose its designation as a NF eligible to receive exceptional therapy care rates if:

(a) The NF provides substandard care or is subject to a stop placement or civil monetary penalties related to resident care;

(b) Any findings of Medicare/Medicaid fraud are levied against the NF licensee, to include individuals, partnerships, corporations, or other legal entities licensed to operate a nursing home; or

(c) It loses its CARF accreditation status as a result of poor resident care.

(8) Based on monitoring and analysis of the NF receiving exceptional therapy care rates, if the NF fails to meet the criteria established in subsections (1) through (4) of this section, the department may revoke its designation as a NF eligible to receive exceptional therapy care rates. If the department revokes a NF's exceptional therapy care designation for substandard specialized rehabilitation therapy, then payment to the NF for all exceptional therapy care will end on the date of revocation.

(9) NFs receiving exceptional therapy care rate payments will be reviewed on an annual basis utilizing the criteria established in subsections (1) through (4) of this section.

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(1) The department will pay an exceptional therapy care rate to a nursing facility (NF) for a Medicaid resident who:

(a) Is less than sixty-five years of age;

(b) Does not qualify for Medicare;

(c) Has a functional need associated with a diagnosis of:

(i) Traumatic brain injury,

(ii) Stroke/cerebrovascular accident (CVA),

(iii) Paraplegia,

(iv) Quadriplegia, or

(v) Major multiple fractures;

(d) Resides in a NF that under WAC 388-96-779 is approved to provide exceptional therapy care; and

(e) Is assessed by a department case manager to be:

(i) Medically stable;

(ii) Physically and cognitively able to participate in the rehabilitation program;

(iii) Willing and able to participate in the rehabilitation program averaging a minimum of two hours per day, five days per week; and

(iv) Has an impairment in two or more of the following areas:

(A) Mobility and strength;

(B) Self-care/ADLs (activities of daily living);

(C) Communication;

(D) Continence-evacuation of bladder and/or bowel;

(E) Kitchen/food preparation-safety and skill;

(F) Cognitive/perceptual functioning; or

(G) Pathfinding skills and safety.

(2)(a) If a NF designated under WAC 388-96-779 wants exceptional therapy care payments for a Medicaid resident, then the NF will submit a request for exceptional therapy care payments on a department-supplied application. A complete exceptional therapy care payment application will include documentation that the Medicaid resident meets the criteria of subsection (1)(a) through (c) of this subsection. The department will:

(i) Review only complete applications; and

(ii) Return incomplete applications to the NF within five days of receipt.

(b) The department will respond to a NF requesting exceptional therapy care payments for a resident, in writing, no later than five working days after receipt of a complete application.

(i) If the department approves exceptional therapy care payments for a resident, the department will:

(A) Authorize five days of exceptional therapy care payments for observation of the resident's response to the intensive therapy;

(B) Conduct an on-site review during the five days of observation to determine whether the resident is an appropriate candidate for intensive therapy and that the NF has a viable plan to provide therapy averaging a minimum of two hours a day, five days per week; and

(C) Extend, when the department is unable to complete the on-site review during the five-day observation period, the exceptional therapy care payments until the department is able to complete the on-site review.

(ii) When the department determines a resident is:

(A) An appropriate candidate and the NF has a viable plan to meet the minimum hours and days of therapy, the department will authorize continuing exceptional therapy care payments; or

(B) An inappropriate candidate or the NF lacks a viable plan to meet the minimum hours and days of therapy, the department will discontinue the authorized days of payment per subsection (2)(b)(i) of this section effective the day after the on-site review and deny continuing exceptional therapy care payments beyond the day of the on-site review.

(iii) Before the conclusion of the on-site visit, the department will give the NF written confirmation of approval or denial of continuing exceptional therapy care payments.

(iv) All exceptional therapy care payments are contingent upon the resident being eligible for Medicaid. A NF may provide exceptional therapy care and/or seek approval for exceptional therapy care payments on residents for whom it does not have a Medicaid award letter because the determination of the resident's Medicaid eligibility is pending. If the resident is denied Medicaid coverage, then the department will not pay for any exceptional therapy care, including the authorized days per subsection (2)(b)(i) of this section.

(3)(a) For the Medicaid resident receiving exceptional therapy care, a NF must complete a FIM or department approved functional assessment measure for each exceptional therapy care Medicaid resident within:

(i) Five calendar days of initiation of the exceptional therapy care;

(ii) Fourteen calendar days of initiation of the exceptional therapy care;

(iii) Thirty calendar days of initiation of the exceptional therapy care;

(iv) Sixty calendar days of initiation of the exceptional therapy care;

(v) Ninety calendar days of initiation of the exceptional therapy care; and

(vi) At discharge or termination of the exceptional therapy care.

(b) The department case manager will review the FIM assessments to determine whether the exceptional therapy care rate continues to be necessary. The department will terminate the exceptional therapy care rate for a Medicaid resident who has made no measurable improvement in rehabilitation as demonstrated by his/her assessments.

(c) The NF will notify the department of the date it discontinues exceptional therapy care to the Medicaid resident. If the NF discontinues the exceptional therapy care because it discharged the Medicaid resident, the NF will provide the department with the discharge disposition and date.

(4) The department will pay an exceptional therapy care rate up to a maximum of one hundred days per episode. After one hundred days, the department will pay for any therapy treatment the Medicaid resident may receive under RCW 74.46.511.

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A nursing facility (NF) may receive an increase in its direct care component rate allocation for providing exceptional care to a Medicaid resident who:

(1) Receives specialized services to meet chronic complex medical conditions and neurodevelopment needs of medically fragile children; and

(2) Resides in a NF where all residents are under age twenty-one with at least fifty percent of the residents entering the facility before the age of fourteen.

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(1)(a) The department will pay for exceptional therapy care authorized under WAC 388-96-780 according to the current therapy fee for service schedule maintained by the department.

(b) All payments for therapy care from third-party payers and/or other department programs, e.g., physical medicine and rehabilitation (PM&R) will be deducted before billing the department under the exceptional therapy program. The nursing facility (NF) will bill the department for the authorized exceptional therapy care according to the department's billing instructions, including but not limited to WAC 388-545-0300, 388-545-0500, and 388-545-0700.

(2) For WAC 388-96-781 residents, the department will pay the resident's total rate in effect on December 31, 1999, inflated by the industry weighted average economic trends and conditions adjustment factor.

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(1) If a contractor wishes to contest the way in which a statute or department rule relating to the nursing facility Medicaid payment system was applied to the contractor by the department, the contractor shall pursue the administrative review process prescribed in WAC 388-96-904.

(a) Adverse actions taken under the authority of this chapter or chapter 74.46 RCW subject to administrative review under WAC 388-96-904 include but are not limited to:

(i) Determining a nursing facility payment rate;

(ii) Calculating a nursing facility settlement;

(iii) Imposing a civil fine on the nursing facility;

(iv) Suspending payment to a nursing facility; or

(v) Refusing to contract with a nursing facility.

(b) Adverse actions taken under the authority of this chapter or chapter 74.46 RCW not subject to administrative review under WAC 388-96-904 include but are not limited to those taken under the authority of RCW 74.46.421 and sections of this chapter implementing RCW 74.46.421.

(2) The administrative review process prescribed in WAC 388-96-904 shall not be used to contest or review unrelated or ancillary department actions, whether review is sought to obtain a ruling on the merits of a claim or to make a record for subsequent judicial review or other purpose. If an issue is raised that is not subject to review under WAC 388-96-904, the presiding office shall dismiss such issue with prejudice to further review under the provisions of WAC 388-96-904, but without prejudice to other administrative or judicial review as may be provided by law. Unrelated or ancillary actions not eligible for administrative review under WAC 388-96-904 include but are not limited to:

(a) Challenges to the adequacy or validity of the public process followed by department in proposing or making a change to the nursing facility Medicaid payment rate methodology, as required by 42 U.S.C. 1396a (a)(13)(A) and WAC 388-96-718;

(b) Challenges to the nursing facility Medicaid payment system that are based in whole or in part on federal laws, regulations, or policies;

(c) Challenges to a contractor's rate that are based in whole or in part of federal laws, regulations, or policies;

(d) Challenges to the legal validity of a statute or regulation;

(e) Issues relating to case mix accuracy review of minimum data set (MDS) nursing facility resident assessments, which shall be limited to separate administrative review under the provisions of WAC 388-96-905;

(f) Quarterly rate updates to reflect changes in a facility's resident case mix; ((and))

(g) Issues relating to any action of the department affecting a Medicaid beneficiary or provider that were not commenced by the office of rates management, aging and adult services administration, for example, entitlement to or payment for durable medical equipment or other services; and

(h) Issues relating to exceptional therapy care and exceptional direct care programs codified at WAC 388-96-779 through 388-96-782.

(3) If a contractor wishes to challenge the legal validity of a statute or regulation relating to the nursing facility Medicaid payment system, or wishes to bring a challenge based in whole or in part on federal law, it must bring such action de novo in a court of proper jurisdiction as may be provided by law.

[Statutory Authority: RCW 74.46.780 as amended by 1998 c 322 § 41.      98-20-023, § 388-96-901, filed 9/25/98, effective 10/1/98.      Statutory Authority: RCW 74.46.800 and 1995 1st sp.s. c 18.      95-19-037 (Order 3896), § 388-96-901, filed 9/12/95, effective 10/13/95.      Statutory Authority: RCW 74.46.800 and 74.09.120.      91-12-026 (Order 3185), § 388-96-901, filed 5/31/91, effective 7/1/91.      Statutory Authority: RCW 74.09.120.      82-21-025 (Order 1892), § 388-96-901, filed 10/13/82; Order 1262, § 388-96-901, filed 12/30/77.]

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