AN
ACT Relating to exceptional care and therapy care payment rates; amending RCW
74.46.506 and 74.46.511; adding a new section to chapter 74.46 RCW; and
providing an expiration date.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
74.46.506 and 1998 c 322 s 25 are each amended to read as follows:
(1)
The direct care component rate allocation corresponds to the provision of
nursing care for one resident of a nursing facility for one day, including direct
care supplies. Therapy services and supplies, which correspond to the therapy
care component rate, shall be excluded. The direct care component rate
includes elements of case mix determined consistent with the principles of this
section and other applicable provisions of this chapter.
(2)
Beginning October 1, 1998, the department shall determine and update quarterly
for each nursing facility serving medicaid residents a facility-specific
per-resident day direct care component rate allocation, to be effective on the
first day of each calendar quarter. In determining direct care component rates
the department shall utilize, as specified in this section, minimum data set
resident assessment data for each resident of the facility, as transmitted to,
and if necessary corrected by, the department in the resident assessment
instrument format approved by federal authorities for use in this state.
(3)
The department may question the accuracy of assessment data for any resident
and utilize corrected or substitute information, however derived, in
determining direct care component rates. The department is authorized to
impose civil fines and to take adverse rate actions against a contractor, as
specified by the department in rule, in order to obtain compliance with
resident assessment and data transmission requirements and to ensure accuracy.
(4)
Cost report data used in setting direct care component rate allocations shall
be 1996 and 1999, for rate periods as specified in RCW 74.46.431(4)(a).
(5)
Beginning October 1, 1998, the department shall rebase each nursing facility's
direct care component rate allocation as described in RCW 74.46.431, adjust its
direct care component rate allocation for economic trends and conditions as
described in RCW 74.46.431, and update its medicaid average case mix index,
consistent with the following:
(a)
Reduce total direct care costs reported by each nursing facility for the
applicable cost report period specified in RCW 74.46.431(4)(a) to reflect any
department adjustments, and to eliminate reported resident therapy costs and
adjustments, in order to derive the facility's total allowable direct care
cost;
(b)
Divide each facility's total allowable direct care cost by its adjusted
resident days for the same report period, increased if necessary to a minimum
occupancy of eighty-five percent; that is, the greater of actual or imputed
occupancy at eighty-five percent of licensed beds, to derive the facility's
allowable direct care cost per resident day;
(c)
Adjust the facility's per resident day direct care cost by the applicable
factor specified in RCW 74.46.431(4) (b) and (c) to derive its adjusted
allowable direct care cost per resident day;
(d)
Divide each facility's adjusted allowable direct care cost per resident day by
the facility average case mix index for the applicable quarters specified by
RCW 74.46.501(7)(b) to derive the facility's allowable direct care cost per
case mix unit;
(e)
Divide nursing facilities into two peer groups: Those located in metropolitan
statistical areas as determined and defined by the United States office of
management and budget or other appropriate agency or office of the federal
government, and those not located in a metropolitan statistical area;
(f)
Array separately the allowable direct care cost per case mix unit for all
metropolitan statistical area and for all nonmetropolitan statistical area
facilities, and determine the median allowable direct care cost per case mix
unit for each peer group;
(g)
Except as provided in (k) of this subsection, from October 1, 1998, through
June 30, 2000, determine each facility's quarterly direct care component rate
as follows:
(i)
Any facility whose allowable cost per case mix unit is less than eighty-five
percent of the facility's peer group median established under (f) of this
subsection shall be assigned a cost per case mix unit equal to eighty-five
percent of the facility's peer group median, and shall have a direct care
component rate allocation equal to the facility's assigned cost per case mix unit
multiplied by that facility's medicaid average case mix index from the
applicable quarter specified in RCW 74.46.501(7)(c);
(ii)
Any facility whose allowable cost per case mix unit is greater than one hundred
fifteen percent of the peer group median established under (f) of this
subsection shall be assigned a cost per case mix unit equal to one hundred
fifteen percent of the peer group median, and shall have a direct care
component rate allocation equal to the facility's assigned cost per case mix
unit multiplied by that facility's medicaid average case mix index from the
applicable quarter specified in RCW 74.46.501(7)(c);
(iii)
Any facility whose allowable cost per case mix unit is between eighty-five and
one hundred fifteen percent of the peer group median established under (f) of
this subsection shall have a direct care component rate allocation equal to the
facility's allowable cost per case mix unit multiplied by that facility's
medicaid average case mix index from the applicable quarter specified in RCW
74.46.501(7)(c);
(h)
Except as provided in (k) of this subsection, from July 1, 2000, through June
30, 2002, determine each facility's quarterly direct care component rate as
follows:
(i)
Any facility whose allowable cost per case mix unit is less than ninety percent
of the facility's peer group median established under (f) of this subsection
shall be assigned a cost per case mix unit equal to ninety percent of the
facility's peer group median, and shall have a direct care component rate
allocation equal to the facility's assigned cost per case mix unit multiplied
by that facility's medicaid average case mix index from the applicable quarter
specified in RCW 74.46.501(7)(c);
(ii)
Any facility whose allowable cost per case mix unit is greater than one hundred
ten percent of the peer group median established under (f) of this subsection
shall be assigned a cost per case mix unit equal to one hundred ten percent of
the peer group median, and shall have a direct care component rate allocation
equal to the facility's assigned cost per case mix unit multiplied by that
facility's medicaid average case mix index from the applicable quarter
specified in RCW 74.46.501(7)(c);
(iii)
Any facility whose allowable cost per case mix unit is between ninety and one
hundred ten percent of the peer group median established under (f) of this
subsection shall have a direct care component rate allocation equal to the
facility's allowable cost per case mix unit multiplied by that facility's
medicaid average case mix index from the applicable quarter specified in RCW
74.46.501(7)(c);
(i)
From July 1, 2002, through June 30, 2004, determine each facility's quarterly
direct care component rate as follows:
(i)
Any facility whose allowable cost per case mix unit is less than ninety-five
percent of the facility's peer group median established under (f) of this
subsection shall be assigned a cost per case mix unit equal to ninety-five
percent of the facility's peer group median, and shall have a direct care
component rate allocation equal to the facility's assigned cost per case mix
unit multiplied by that facility's medicaid average case mix index from the
applicable quarter specified in RCW 74.46.501(7)(c);
(ii)
Any facility whose allowable cost per case mix unit is greater than one hundred
five percent of the peer group median established under (f) of this subsection
shall be assigned a cost per case mix unit equal to one hundred five percent of
the peer group median, and shall have a direct care component rate allocation
equal to the facility's assigned cost per case mix unit multiplied by that
facility's medicaid average case mix index from the applicable quarter
specified in RCW 74.46.501(7)(c);
(iii)
Any facility whose allowable cost per case mix unit is between ninety-five and
one hundred five percent of the peer group median established under (f) of this
subsection shall have a direct care component rate allocation equal to the
facility's allowable cost per case mix unit multiplied by that facility's
medicaid average case mix index from the applicable quarter specified in RCW
74.46.501(7)(c);
(j)
Beginning July 1, 2004, determine each facility's quarterly direct care
component rate by multiplying the facility's peer group median allowable direct
care cost per case mix unit by that facility's medicaid average case mix index
from the applicable quarter as specified in RCW 74.46.501(7)(c).
(k)(i)
Between October 1, 1998, and June 30, 2000, the department shall compare each
facility's direct care component rate allocation calculated under (g) of this
subsection with the facility's nursing services component rate in effect on ((June))
September 30, 1998, less therapy costs, plus any exceptional care
offsets as reported on the cost report, adjusted for economic trends and
conditions as provided in RCW 74.46.431. A facility shall receive the higher
of the two rates;
(ii)
Between July 1, 2000, and June 30, 2002, the department shall compare each
facility's direct care component rate allocation calculated under (h) of this
subsection with the facility's direct care component rate in effect on June 30,
2000. A facility shall receive the higher of the two rates.
(6)
The direct care component rate allocations calculated in accordance with this
section shall be adjusted to the extent necessary to comply with RCW
74.46.421. If the department determines that the weighted average rate
allocations for all rate components for all facilities is likely to exceed the
weighted average total rate specified in the state biennial appropriations act,
the department shall adjust the rate allocations calculated in this section
proportional to the amount by which the total weighted average rate allocations
would otherwise exceed the budgeted level. Such adjustments shall only be made
prospectively, not retrospectively.
(7)
Payments resulting from increases in direct care component rates, granted under
authority of section 2(1) of this act for a facility's exceptional care
residents, shall be offset against the facility's examined, allowable direct
care costs, for each report year or partial period such increases are paid.
Such reductions in allowable direct care costs shall be for rate setting,
settlement, and other purposes deemed appropriate by the department.
NEW
SECTION. Sec. 2. A
new section is added to chapter 74.46 RCW to read as follows:
(1)(a)
The department is authorized to increase the direct care component rate
allocation calculated under RCW 74.46.506(5) for residents who have unmet
exceptional care needs as determined by the department in rule. The department
may, by rule, establish criteria, patient categories, and methods of
exceptional care payment.
(b)
The department shall submit a report to the health care and fiscal committees
of the legislature by December 12, 2002, that addresses:
(i)
The number of individuals on whose behalf exceptional care payments have been
made under this section, their diagnosis, and the amount of the payments; and
(ii)
An assessment as to whether the availability of exceptional care payments
resulted in more expedient placement of residents into nursing homes and fewer
and/or shorter hospitalizations.
(2)(a)
The department shall by January 1, 2000, adopt rules and implement a system of
exceptional care payments for therapy care.
(i)
Payments may be made on behalf of facility residents who are under age
sixty-five, not eligible for medicare, and can achieve significant progress in
their functional status if provided with intensive therapy care services.
(ii)
Payment under this subsection is limited to no more than twelve facilities that
have demonstrated excellence in therapy care, based upon criteria defined by
rule. A facility accredited by the commission for accreditation of
rehabilitation facilities (CARF) shall be deemed to meet the criteria for
demonstrated excellence in therapy care. However, CARF accreditation is not
required for payment under this subsection.
(iii)
Payments may be made only after approval of a rehabilitation plan of care for
each resident on whose behalf a payment is made under this subsection, and each
resident's progress must be periodically monitored.
(b)
The department shall submit a report to the health care and fiscal committees
of the legislature by December 12, 2002, that addresses:
(i)
The number of individuals on whose behalf therapy payments were made under this
section, and the amount of the payments; and
(ii)
An assessment as to whether the availability of exceptional care payments for
therapy care resulted in substantial progress in residents' functional status,
more expedient placement of residents into less expensive settings, or other
long-term cost savings.
(3)
This section expires June 30, 2003.
Sec.
3. RCW
74.46.511 and 1998 c 322 s 26 are each amended to read as follows:
(1)
The therapy care component rate allocation corresponds to the provision of
medicaid one-on-one therapy provided by a qualified therapist as defined in
this chapter, including therapy supplies and therapy consultation, for one day
for one medicaid resident of a nursing facility. The therapy care component
rate allocation for October 1, 1998, through June 30, 2001, shall be based on
adjusted therapy costs and days from calendar year 1996. The therapy component
rate allocation for July 1, 2001, through June 30, 2004, shall be based on
adjusted therapy costs and days from calendar year 1999. The therapy care
component rate shall be adjusted for economic trends and conditions as
specified in RCW 74.46.431(5)(b), and shall be determined in accordance with
this section.
(2)
In rebasing, as provided in RCW 74.46.431(5)(a), the department shall take from
the cost reports of facilities the following reported information:
(a)
Direct one-on-one therapy charges for all residents by payer including charges
for supplies;
(b)
The total units or modules of therapy care for all residents by type of therapy
provided, for example, speech or physical. A unit or module of therapy care is
considered to be fifteen minutes of one-on-one therapy provided by a qualified
therapist or support personnel; and
(c)
Therapy consulting expenses for all residents.
(3)
The department shall determine for all residents the total cost per unit of
therapy for each type of therapy by dividing the total adjusted one-on-one
therapy expense for each type by the total units provided for that therapy
type.
(4)
The department shall divide medicaid nursing facilities in this state into two
peer groups:
(a)
Those facilities located within a metropolitan statistical area; and
(b)
Those not located in a metropolitan statistical area.
Metropolitan
statistical areas and nonmetropolitan statistical areas shall be as determined
by the United States office of management and budget or other applicable
federal office. The department shall array the facilities in each peer group
from highest to lowest based on their total cost per unit of therapy for each
therapy type. The department shall determine the median total cost per unit of
therapy for each therapy type and add ten percent of median total cost per unit
of therapy. The cost per unit of therapy for each therapy type at a nursing
facility shall be the lesser of its cost per unit of therapy for each therapy
type or the median total cost per unit plus ten percent for each therapy type
for its peer group.
(5)
The department shall calculate each nursing facility's therapy care component
rate allocation as follows:
(a)
To determine the allowable total therapy cost for each therapy type, the
allowable cost per unit of therapy for each type of therapy shall be multiplied
by the total therapy units for each type of therapy;
(b)
The medicaid allowable one-on-one therapy expense shall be calculated taking
the allowable total therapy cost for each therapy type times the medicaid
percent of total therapy charges for each therapy type;
(c)
The medicaid allowable one-on-one therapy expense for each therapy type shall
be divided by total adjusted medicaid days to arrive at the medicaid one-on-one
therapy cost per patient day for each therapy type;
(d)
The medicaid one-on-one therapy cost per patient day for each therapy type
shall be multiplied by total adjusted patient days for all residents to
calculate the total allowable one-on-one therapy expense. The lesser of the
total allowable therapy consultant expense for the therapy type or a reasonable
percentage of allowable therapy consultant expense for each therapy type, as
established in rule by the department, shall be added to the total allowable
one-on-one therapy expense to determine the allowable therapy cost for each
therapy type;
(e)
The allowable therapy cost for each therapy type shall be added together, the
sum of which shall be the total allowable therapy expense for the nursing
facility;
(f)
The total allowable therapy expense will be divided by the greater of adjusted
total patient days from the cost report on which the therapy expenses were reported,
or patient days at eighty-five percent occupancy of licensed beds. The outcome
shall be the nursing facility's therapy care component rate allocation.
(6)
The therapy care component rate allocations calculated in accordance with this
section shall be adjusted to the extent necessary to comply with RCW
74.46.421. If the department determines that the weighted average rate
allocations for all rate components for all facilities is likely to exceed the
weighted average total rate specified in the state biennial appropriations act,
the department shall adjust the rate allocations calculated in this section
proportional to the amount by which the total weighted average rate allocations
would otherwise exceed the budgeted level. Such adjustments shall only be made
prospectively, not retrospectively.
(7) The therapy care component rate shall be suspended for
medicaid residents in qualified nursing facilities designated by the department
who are receiving therapy paid by the department outside the facility daily
rate under section 2(2) of this act.
