BILL REQ. #: S-3791.1
| State of Washington | 58th Legislature | 2004 Regular Session |
Read first time 01/19/2004. Referred to Committee on Health & Long-Term Care.
AN ACT Relating to the nursing facility medicaid payment system; amending RCW 74.46.431, 74.46.433, 74.46.496, 74.46.501, 74.46.506, and 74.46.511; repealing RCW 74.46.091, 74.46.535, and 82.71.020; and providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 74.46.431 and 2001 1st sp.s. c 8 s 5 are each amended
to read as follows:
(1) Effective July 1, 1999, nursing facility medicaid payment rate
allocations shall be facility-specific and shall have seven components:
Direct care, therapy care, support services, operations, property,
financing allowance, and variable return. The department shall
establish and adjust each of these components, as provided in this
section and elsewhere in this chapter, for each medicaid nursing
facility in this state.
(2) All component rate allocations for essential community
providers as defined in this chapter shall be based upon a minimum
facility occupancy of eighty-five percent of licensed beds, regardless
of how many beds are set up or in use. For all facilities other than
essential community providers, effective July 1, 2001, component rate
allocations in direct care, therapy care, support services, variable
return, operations, property, and financing allowance shall continue to
be based upon a minimum facility occupancy of eighty-five percent of
licensed beds. For all facilities other than essential community
providers, effective July 1, 2002, the component rate allocations in
operations, property, and financing allowance shall be based upon a
minimum facility occupancy of ninety percent of licensed beds,
regardless of how many beds are set up or in use.
(3) Information and data sources used in determining medicaid
payment rate allocations, including formulas, procedures, cost report
periods, resident assessment instrument formats, resident assessment
methodologies, and resident classification and case mix weighting
methodologies, may be substituted or altered from time to time as
determined by the department.
(4)(a) Direct care component rate allocations shall be established
using adjusted cost report data covering at least six months. Adjusted
cost report data from 1996 will be used for October 1, 1998, through
June 30, 2001, direct care component rate allocations; adjusted cost
report data from 1999 will be used for July 1, 2001, ((through June 30,
2004)) until the effective date of this act, direct care component rate
allocations. Beginning on the effective date of this act, direct care
component rate allocations shall be cost-rebased in each odd year
beginning on July 1st and established using the immediately preceding
calendar year adjusted cost report data, so that: Adjusted cost report
data from 2004 is used for July 1, 2005, through June 30, 2007, direct
care component rate allocations; adjusted cost report data from 2006 is
used for July 1, 2007, through June 30, 2009, direct care component
rate allocations; and so forth.
(b) Direct care component rate allocations based on 1996 cost
report data shall be adjusted annually for economic trends and
conditions by a factor or factors defined in the biennial
appropriations act. A different economic trends and conditions
adjustment factor or factors may be defined in the biennial
appropriations act for facilities whose direct care component rate is
set equal to their adjusted June 30, 1998, rate, as provided in RCW
74.46.506(5)(i).
(c) Direct care component rate allocations based on 1999 cost
report data shall be adjusted annually for economic trends and
conditions by a factor or factors defined in the biennial
appropriations act. A different economic trends and conditions
adjustment factor or factors may be defined in the biennial
appropriations act for facilities whose direct care component rate is
set equal to their adjusted June 30, 1998, rate, as provided in RCW
74.46.506(5)(i).
(d) Beginning on the effective date of this act, the direct care
component rate allocations, established as of July 1st in each even-numbered year, beginning with July 1, 2006, shall be adjusted for
economic trends and conditions by a factor or factors defined in the
biennial appropriations act.
(5)(a) Therapy care component rate allocations shall be established
using adjusted cost report data covering at least six months. Adjusted
cost report data from 1996 will be used for October 1, 1998, through
June 30, 2001, therapy care component rate allocations; adjusted cost
report data from 1999 will be used for July 1, 2001, ((through June 30,
2004)) until the effective date of this act, therapy care component
rate allocations. Beginning on the effective date of this act, therapy
care component rate allocations shall be cost-rebased in each odd year
beginning on July 1st and established using the immediately preceding
calendar year adjusted cost report data, so that: Adjusted cost report
data from 2004 is used for July 1, 2005, through June 30, 2007, therapy
care component rate allocations; adjusted cost report data from 2006 is
used for July 1, 2007, through June 30, 2009, therapy care component
rate allocations; and so forth.
(b) Therapy care component rate allocations shall be adjusted
annually for economic trends and conditions by a factor or factors
defined in the biennial appropriations act.
(c) Beginning on the effective date of this act, the therapy care
component rate allocations, established as of July 1st in each even-numbered year, beginning with July 1, 2006, shall be adjusted for
economic trends and conditions by a factor or factors defined in the
biennial appropriations act.
(6)(a) Support services component rate allocations shall be
established using adjusted cost report data covering at least six
months. Adjusted cost report data from 1996 shall be used for October
1, 1998, through June 30, 2001, support services component rate
allocations; adjusted cost report data from 1999 shall be used for July
1, 2001, ((through June 30, 2004)) until the effective date of this
act, support services component rate allocations. Beginning on the
effective date of this act, support services component rate allocations
shall be cost-rebased in each odd year beginning on July 1st and
established using the immediately preceding calendar year adjusted cost
report data, so that: Adjusted cost report data from 2004 is used for
July 1, 2005, through June 30, 2007, support services component rate
allocations; adjusted cost report data from 2006 is used for July 1,
2007, through June 30, 2009, support services component rate
allocations; and so forth.
(b) Support services component rate allocations shall be adjusted
annually for economic trends and conditions by a factor or factors
defined in the biennial appropriations act.
(c) Beginning on the effective date of this act, the support
services component rate allocations, established as of July 1st in each
even-numbered year, beginning with July 1, 2006, shall be adjusted for
economic trends and conditions by a factor or factors defined in the
biennial appropriations act.
(7)(a) Operations component rate allocations shall be established
using adjusted cost report data covering at least six months. Adjusted
cost report data from 1996 shall be used for October 1, 1998, through
June 30, 2001, operations component rate allocations; adjusted cost
report data from 1999 shall be used for July 1, 2001, ((through June
30, 2004)) until the effective date of this act, operations component
rate allocations. Beginning on the effective date of this act,
operations component rate allocations shall be cost-rebased in each odd
year beginning on July 1st and established using the immediately
preceding calendar year adjusted cost report data, so that: Adjusted
cost report data from 2004 is used for July 1, 2005, through June 30,
2007, operations component rate allocations; adjusted cost report data
from 2006 is used for July 1, 2007, through June 30, 2009, operations
component rate allocations; and so forth.
(b) Operations component rate allocations shall be adjusted
annually for economic trends and conditions by a factor or factors
defined in the biennial appropriations act.
(c) Beginning on the effective date of this act, the operations
component rate allocations, established as of July 1st in each even-
numbered year, beginning with July 1, 2006, shall be adjusted for
economic trends and conditions by a factor or factors defined in the
biennial appropriations act.
(8) For July 1, 1998, through September 30, 1998, a facility's
property and return on investment component rates shall be the
facility's June 30, 1998, property and return on investment component
rates, without increase. For October 1, 1998, through June 30, 1999,
a facility's property and return on investment component rates shall be
rebased utilizing 1997 adjusted cost report data covering at least six
months of data.
(9) Total payment rates under the nursing facility medicaid payment
system shall not exceed facility rates charged to the general public
for comparable services.
(10) Medicaid contractors shall pay to all facility staff a minimum
wage of the greater of the state minimum wage or the federal minimum
wage.
(11) The department shall establish in rule procedures, principles,
and conditions for determining component rate allocations for
facilities in circumstances not directly addressed by this chapter,
including but not limited to: The need to prorate inflation for
partial-period cost report data, newly constructed facilities, existing
facilities entering the medicaid program for the first time or after a
period of absence from the program, existing facilities with expanded
new bed capacity, existing medicaid facilities following a change of
ownership of the nursing facility business, facilities banking beds or
converting beds back into service, facilities temporarily reducing the
number of set-up beds during a remodel, facilities having less than six
months of either resident assessment, cost report data, or both, under
the current contractor prior to rate setting, and other circumstances.
(12) The department shall establish in rule procedures, principles,
and conditions, including necessary threshold costs, for adjusting
rates to reflect capital improvements or new requirements imposed by
the department or the federal government. Any such rate adjustments
are subject to the provisions of RCW 74.46.421.
(13) Effective July 1, 2001, medicaid rates shall continue to be
revised downward in all components, in accordance with department
rules, for facilities converting banked beds to active service under
chapter 70.38 RCW, by using the facility's increased licensed bed
capacity to recalculate minimum occupancy for rate setting. However,
for facilities other than essential community providers which bank beds
under chapter 70.38 RCW, after May 25, 2001, medicaid rates shall be
revised upward, in accordance with department rules, in direct care,
therapy care, support services, and variable return components only, by
using the facility's decreased licensed bed capacity to recalculate
minimum occupancy for rate setting, but no upward revision shall be
made to operations, property, or financing allowance component rates.
(14) Facilities obtaining a certificate of need or a certificate of
need exemption under chapter 70.38 RCW after June 30, 2001, must have
a certificate of capital authorization in order for (a) the
depreciation resulting from the capitalized addition to be included in
calculation of the facility's property component rate allocation; and
(b) the net invested funds associated with the capitalized addition to
be included in calculation of the facility's financing allowance rate
allocation.
Sec. 2 RCW 74.46.433 and 2001 1st sp.s. c 8 s 6 are each amended
to read as follows:
(1) The department shall establish for each medicaid nursing
facility a variable return component rate allocation. In determining
the variable return allowance:
(a) The variable return array and percentage shall be assigned
whenever rebasing of noncapital rate allocations is scheduled under RCW
((46.46.431 [74.46.431])) 74.46.431 (4), (5), (6), and (7).
(b) To calculate the array of facilities for the July 1, 2001, rate
setting, the department, without using peer groups, shall first rank
all facilities in numerical order from highest to lowest according to
each facility's examined and documented, but unlidded, combined direct
care, therapy care, support services, and operations per resident day
cost from the 1999 cost report period. However, before being combined
with other per resident day costs and ranked, a facility's direct care
cost per resident day shall be adjusted to reflect its facility average
case mix index, to be averaged from the four calendar quarters of 1999,
weighted by the facility's resident days from each quarter, under RCW
74.46.501(7)(b)(ii). The array shall then be divided into four
quartiles, each containing, as nearly as possible, an equal number of
facilities, and four percent shall be assigned to facilities in the
lowest quartile, three percent to facilities in the next lowest
quartile, two percent to facilities in the next highest quartile, and
one percent to facilities in the highest quartile.
(c) To calculate the array of facilities for July 1, 2005, and each
subsequent July 1st rate setting occurring in an odd-numbered year, the
department, without using peer groups, shall first rank all facilities
in numerical order from highest to lowest according to each facility's
examined and documented, but unlidded, combined direct care, therapy
care, support services, and operations per resident day cost from the
calendar year cost report period specified in RCW 74.46.431. However,
before being combined with other per resident day costs and ranked, a
facility's direct care cost per resident day shall be adjusted to
reflect its facility average case mix index, to be averaged from the
four calendar quarters of the cost report period used to rebase each
odd-numbered year's July 1st component rate allocations, weighted by
the facility's resident days from each quarter under RCW
74.46.501(7)(b)(iii). The array shall then be divided into four
quartiles, each containing, as nearly as possible, an equal number of
facilities, and four percent shall be assigned to facilities in the
lowest quartile, three percent to facilities in the next lowest
quartile, two percent to facilities in the next highest quartile, and
one percent to facilities in the highest quartile. The department
shall((, subject to (d) of this subsection,)) compute the variable
return allowance by multiplying a facility's assigned percentage by the
sum of the facility's direct care, therapy care, support services, and
operations component rates determined in accordance with this chapter
and rules adopted by the department.
(((d) Effective July 1, 2001, if a facility's examined and
documented direct care cost per resident day for the preceding report
year is lower than its average direct care component rate weighted by
medicaid resident days for the same year, the facility's direct care
cost shall be substituted for its July 1, 2001, direct care component
rate, and its variable return component rate shall be determined or
adjusted each July 1st by multiplying the facility's assigned
percentage by the sum of the facility's July 1, 2001, therapy care,
support services, and operations component rates, and its direct care
cost per resident day for the preceding year.))
(2) The variable return rate allocation calculated in accordance
with this section shall be adjusted to the extent necessary to comply
with RCW 74.46.421.
Sec. 3 RCW 74.46.496 and 1998 c 322 s 23 are each amended to read
as follows:
(1) Each case mix classification group shall be assigned a case mix
weight. The case mix weight for each resident of a nursing facility
for each calendar quarter shall be based on data from resident
assessment instruments completed for the resident and weighted by the
number of days the resident was in each case mix classification group.
Days shall be counted as provided in this section.
(2) The case mix weights shall be based on the average minutes per
registered nurse, licensed practical nurse, and certified nurse aide,
for each case mix group, and using the health care financing
administration of the United States department of health and human
services 1995 nursing facility staff time measurement study stemming
from its multistate nursing home case mix and quality demonstration
project. Those minutes shall be weighted by statewide ratios of
registered nurse to certified nurse aide, and licensed practical nurse
to certified nurse aide, wages, including salaries and benefits, which
shall be based on 1995 cost report data for this state.
(3) The case mix weights shall be determined as follows:
(a) Set the certified nurse aide wage weight at 1.000 and calculate
wage weights for registered nurse and licensed practical nurse average
wages by dividing the certified nurse aide average wage into the
registered nurse average wage and licensed practical nurse average
wage;
(b) Calculate the total weighted minutes for each case mix group in
the resource utilization group III classification system by multiplying
the wage weight for each worker classification by the average number of
minutes that classification of worker spends caring for a resident in
that resource utilization group III classification group, and summing
the products;
(c) Assign a case mix weight of 1.000 to the resource utilization
group III classification group with the lowest total weighted minutes
and calculate case mix weights by dividing the lowest group's total
weighted minutes into each group's total weighted minutes and rounding
weight calculations to the third decimal place.
(4) The case mix weights in this state may be revised if the health
care financing administration updates its nursing facility staff time
measurement studies. The case mix weights shall be revised, but only
when direct care component rates are cost-rebased as provided in
subsection (5) of this section, to be effective on the July 1st
effective date of each cost-rebased direct care component rate.
However, the department may revise case mix weights more frequently if,
and only if, significant variances in wage ratios occur among direct
care staff in the different caregiver classifications identified in
this section.
(5) Case mix weights shall be revised when direct care component
rates are cost-rebased ((every three years)) as provided in RCW
74.46.431(4)(a).
Sec. 4 RCW 74.46.501 and 2001 1st sp.s. c 8 s 9 are each amended
to read as follows:
(1) From individual case mix weights for the applicable quarter,
the department shall determine two average case mix indexes for each
medicaid nursing facility, one for all residents in the facility, known
as the facility average case mix index, and one for medicaid residents,
known as the medicaid average case mix index.
(2)(a) In calculating a facility's two average case mix indexes for
each quarter, the department shall include all residents or medicaid
residents, as applicable, who were physically in the facility during
the quarter in question (January 1st through March 31st, April 1st
through June 30th, July 1st through September 30th, or October 1st
through December 31st).
(b) The facility average case mix index shall exclude all default
cases as defined in this chapter. However, the medicaid average case
mix index shall include all default cases.
(3) Both the facility average and the medicaid average case mix
indexes shall be determined by multiplying the case mix weight of each
resident, or each medicaid resident, as applicable, by the number of
days, as defined in this section and as applicable, the resident was at
each particular case mix classification or group, and then averaging.
(4)(a) In determining the number of days a resident is classified
into a particular case mix group, the department shall determine a
start date for calculating case mix grouping periods as follows:
(i) If a resident's initial assessment for a first stay or a return
stay in the nursing facility is timely completed and transmitted to the
department by the cutoff date under state and federal requirements and
as described in subsection (5) of this section, the start date shall be
the later of either the first day of the quarter or the resident's
facility admission or readmission date;
(ii) If a resident's significant change, quarterly, or annual
assessment is timely completed and transmitted to the department by the
cutoff date under state and federal requirements and as described in
subsection (5) of this section, the start date shall be the date the
assessment is completed;
(iii) If a resident's significant change, quarterly, or annual
assessment is not timely completed and transmitted to the department by
the cutoff date under state and federal requirements and as described
in subsection (5) of this section, the start date shall be the due date
for the assessment.
(b) If state or federal rules require more frequent assessment, the
same principles for determining the start date of a resident's
classification in a particular case mix group set forth in subsection
(4)(a) of this section shall apply.
(c) In calculating the number of days a resident is classified into
a particular case mix group, the department shall determine an end date
for calculating case mix grouping periods as follows:
(i) If a resident is discharged before the end of the applicable
quarter, the end date shall be the day before discharge;
(ii) If a resident is not discharged before the end of the
applicable quarter, the end date shall be the last day of the quarter;
(iii) If a new assessment is due for a resident or a new assessment
is completed and transmitted to the department, the end date of the
previous assessment shall be the earlier of either the day before the
assessment is due or the day before the assessment is completed by the
nursing facility.
(5) The cutoff date for the department to use resident assessment
data, for the purposes of calculating both the facility average and the
medicaid average case mix indexes, and for establishing and updating a
facility's direct care component rate, shall be one month and one day
after the end of the quarter for which the resident assessment data
applies.
(6) A threshold of ninety percent, as described and calculated in
this subsection, shall be used to determine the case mix index each
quarter. The threshold shall also be used to determine which
facilities' costs per case mix unit are included in determining the
ceiling, floor, and price. If the facility does not meet the ninety
percent threshold, the department may use an alternate case mix index
to determine the facility average and medicaid average case mix indexes
for the quarter. The threshold is a count of unique minimum data set
assessments, and it shall include resident assessment instrument
tracking forms for residents discharged prior to completing an initial
assessment. The threshold is calculated by dividing a facility's count
of residents being assessed by the average census for the facility. A
daily census shall be reported by each nursing facility as it transmits
assessment data to the department. The department shall compute a
quarterly average census based on the daily census. If no census has
been reported by a facility during a specified quarter, then the
department shall use the facility's licensed beds as the denominator in
computing the threshold.
(7)(a) Although the facility average and the medicaid average case
mix indexes shall both be calculated quarterly, the facility average
case mix index will be used ((only every three years)) throughout the
applicable cost-rebasing period in combination with cost report data as
specified by RCW 74.46.431 and 74.46.506, to establish a facility's
allowable cost per case mix unit. A facility's medicaid average case
mix index shall be used to update a nursing facility's direct care
component rate quarterly.
(b) The facility average case mix index used to establish each
nursing facility's direct care component rate shall be based on an
average of calendar quarters of the facility's average case mix
indexes.
(i) For October 1, 1998, direct care component rates, the
department shall use an average of facility average case mix indexes
from the four calendar quarters of 1997.
(ii) For July 1, 2001, direct care component rates, the department
shall use an average of facility average case mix indexes from the four
calendar quarters of 1999.
(iii) Beginning on July 1, 2005, and for each subsequent July 1st
occurring in an odd-numbered year, when establishing the direct care
component rates, the department shall use an average of facility case
mix indexes from the four calendar quarters occurring during the cost
report period used to rebase the direct care component rate allocations
as specified in RCW 74.46.431.
(c) The medicaid average case mix index used to update or
recalibrate a nursing facility's direct care component rate quarterly
shall be from the calendar quarter commencing six months prior to the
effective date of the quarterly rate. For example, October 1, 1998,
through December 31, 1998, direct care component rates shall utilize
case mix averages from the April 1, 1998, through June 30, 1998,
calendar quarter, and so forth.
Sec. 5 RCW 74.46.506 and 2001 1st sp.s. c 8 s 10 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 ending June
30, 2005, and shall be the immediately preceding cost report data for
direct care component rate allocations set beginning July 1, 2005, and
each subsequent July 1st, occurring in each subsequent odd-numbered
year, 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), and
(d) 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) Effective for July 1, 2001, rate setting, divide nursing
facilities into at least two and, if applicable, three peer groups:
Those located in nonurban counties; those located in high labor-cost
counties, if any; and those located in other urban counties;
(f) Array separately the allowable direct care cost per case mix
unit for all facilities in nonurban counties; for all facilities in
high labor-cost counties, if applicable; and for all facilities in
other urban counties, and determine the median allowable direct care
cost per case mix unit for each peer group;
(g) Except as provided in (i) 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 (i) of this subsection, from July 1,
2000, forward, and for all future rate setting, 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)(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 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. Between July 1, 2001, and June 30, 2002,
if during any quarter a facility whose rate paid under (h) of this
subsection is greater than either the direct care rate in effect on
June 30, 2000, or than that facility's allowable direct care cost per
case mix unit calculated in (d) of this subsection multiplied by that
facility's medicaid average case mix index from the applicable quarter
specified in RCW 74.46.501(7)(c), the facility shall be paid in that
and each subsequent quarter pursuant to (h) of this subsection and
shall not be entitled to the greater of the two rates.
(iii) Effective July 1, 2002, all direct care component rate
allocations shall be as determined under (h) of this subsection.
(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.
(7) Payments resulting from increases in direct care component
rates, granted under authority of RCW 74.46.508(1) 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.
Sec. 6 RCW 74.46.511 and 2001 1st sp.s. c 8 s 11 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)) 2005, shall
be based on adjusted therapy costs and days from calendar year 1999.
For the July 1, 2005, and each subsequent July 1st occurring in an odd-numbered year, therapy care component rate allocations shall be based
on adjusted therapy costs and days from the immediately preceding even-numbered calendar year. The therapy care component rate shall be
adjusted for economic trends and conditions as specified in RCW
74.46.431(5) (b) and (c), 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 urban counties; and
(b) Those located within nonurban counties.
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.
(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 RCW 74.46.508(2).
NEW SECTION. Sec. 7 The following acts or parts of acts are each
repealed:
(1) RCW 74.46.091 (Additional reporting requirements for quality
maintenance fee) and 2003 1st sp.s. c 16 s 4;
(2) RCW 74.46.535 (Quality maintenance fee) and 2003 1st sp.s. c 16
s 5; and
(3) RCW 82.71.020 (Fee imposed) and 2003 1st sp.s. c 16 s 2.
NEW SECTION. Sec. 8 This act takes effect July 1, 2005.