BILL REQ. #: H-2398.1
State of Washington | 63rd Legislature | 2013 Regular Session |
Read first time 04/18/13. Referred to Committee on Appropriations.
AN ACT Relating to modifying the nursing facility medicaid payment system by delaying the rebase of certain rate components and extending certain rate add-ons; amending RCW 74.46.431 and 74.46.501; creating a new section; providing an effective date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 74.46.431 and 2011 1st sp.s. c 7 s 1 are each amended
to read as follows:
(1) Nursing facility medicaid payment rate allocations shall be
facility-specific and shall have six components: Direct care, therapy
care, support services, operations, property, and financing allowance.
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) Component rate allocations in therapy care and support services
for all facilities 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. Component rate allocations in operations, property,
and financing allowance for essential community providers shall be
based upon a minimum facility occupancy of eighty-seven percent of
licensed beds, regardless of how many beds are set up or in use.
Component rate allocations in operations, property, and financing
allowance for small nonessential community providers shall be based
upon a minimum facility occupancy of ninety-two percent of licensed
beds, regardless of how many beds are set up or in use. Component rate
allocations in operations, property, and financing allowance for large
nonessential community providers shall be based upon a minimum facility
occupancy of ninety-five percent of licensed beds, regardless of how
many beds are set up or in use. For all facilities, the component rate
allocation in direct care shall be based upon actual facility
occupancy. The median cost limits used to set component rate
allocations shall be based on the applicable minimum occupancy
percentage. In determining each facility's therapy care component rate
allocation under RCW 74.46.511, the department shall apply the
applicable minimum facility occupancy adjustment before creating the
array of facilities' adjusted therapy costs per adjusted resident day.
In determining each facility's support services component rate
allocation under RCW 74.46.515(3), the department shall apply the
applicable minimum facility occupancy adjustment before creating the
array of facilities' adjusted support services costs per adjusted
resident day. In determining each facility's operations component rate
allocation under RCW 74.46.521(3), the department shall apply the
minimum facility occupancy adjustment before creating the array of
facilities' adjusted general operations costs per adjusted resident
day.
(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.
Effective July 1, 2009, the direct care component rate allocation shall
be rebased, so that adjusted cost report data for calendar year 2007 is
used for July 1, 2009, through June 30, ((2013)) 2015. Beginning July
1, ((2013)) 2015, the direct care component rate allocation shall be
rebased biennially during every odd-numbered year thereafter using
adjusted cost report data from two years prior to the rebase period, so
adjusted cost report data for calendar year ((2011)) 2013 is used for
July 1, ((2013)) 2015, through June 30, ((2015)) 2017, and so forth.
(b) Direct care component rate allocations established in
accordance with this chapter shall be adjusted annually for economic
trends and conditions by a factor or factors defined in the biennial
appropriations act. The economic trends and conditions factor or
factors defined in the biennial appropriations act shall not be
compounded with the economic trends and conditions factor or factors
defined in any other biennial appropriations acts before applying it to
the direct care component rate allocation established in accordance
with this chapter. When no economic trends and conditions factor or
factors for either fiscal year are defined in a biennial appropriations
act, no economic trends and conditions factor or factors defined in any
earlier biennial appropriations act shall be applied solely or
compounded to the direct care component rate allocation established in
accordance with this chapter.
(5)(a) Therapy care component rate allocations shall be established
using adjusted cost report data covering at least six months.
Effective July 1, 2009, the therapy care component rate allocation
shall be cost rebased, so that adjusted cost report data for calendar
year 2007 is used for July 1, 2009, through June 30, ((2013)) 2015.
Beginning July 1, ((2013)) 2015, the therapy care component rate
allocation shall be rebased biennially during every odd-numbered year
thereafter using adjusted cost report data from two years prior to the
rebase period, so adjusted cost report data for calendar year ((2011))
2013 is used for July 1, ((2013)) 2015, through June 30, ((2015)) 2017,
and so forth.
(b) Therapy care component rate allocations established in
accordance with this chapter shall be adjusted annually for economic
trends and conditions by a factor or factors defined in the biennial
appropriations act. The economic trends and conditions factor or
factors defined in the biennial appropriations act shall not be
compounded with the economic trends and conditions factor or factors
defined in any other biennial appropriations acts before applying it to
the therapy care component rate allocation established in accordance
with this chapter. When no economic trends and conditions factor or
factors for either fiscal year are defined in a biennial appropriations
act, no economic trends and conditions factor or factors defined in any
earlier biennial appropriations act shall be applied solely or
compounded to the therapy care component rate allocation established in
accordance with this chapter.
(6)(a) Support services component rate allocations shall be
established using adjusted cost report data covering at least six
months. Effective July 1, 2009, the support services component rate
allocation shall be cost rebased, so that adjusted cost report data for
calendar year 2007 is used for July 1, 2009, through June 30, ((2013))
2015. Beginning July 1, ((2013)) 2015, the support services component
rate allocation shall be rebased biennially during every odd-numbered
year thereafter using adjusted cost report data from two years prior to
the rebase period, so adjusted cost report data for calendar year
((2011)) 2013 is used for July 1, ((2013)) 2015, through June 30,
((2015)) 2017, and so forth.
(b) Support services component rate allocations established in
accordance with this chapter shall be adjusted annually for economic
trends and conditions by a factor or factors defined in the biennial
appropriations act. The economic trends and conditions factor or
factors defined in the biennial appropriations act shall not be
compounded with the economic trends and conditions factor or factors
defined in any other biennial appropriations acts before applying it to
the support services component rate allocation established in
accordance with this chapter. When no economic trends and conditions
factor or factors for either fiscal year are defined in a biennial
appropriations act, no economic trends and conditions factor or factors
defined in any earlier biennial appropriations act shall be applied
solely or compounded to the support services component rate allocation
established in accordance with this chapter.
(7)(a) Operations component rate allocations shall be established
using adjusted cost report data covering at least six months.
Effective July 1, 2009, the operations component rate allocation shall
be cost rebased, so that adjusted cost report data for calendar year
2007 is used for July 1, 2009, through June 30, ((2013)) 2015.
Beginning July 1, ((2013)) 2015, the operations care component rate
allocation shall be rebased biennially during every odd-numbered year
thereafter using adjusted cost report data from two years prior to the
rebase period, so adjusted cost report data for calendar year ((2011))
2013 is used for July 1, ((2013)) 2015, through June 30, ((2015)) 2017,
and so forth.
(b) Operations component rate allocations established in accordance
with this chapter shall be adjusted annually for economic trends and
conditions by a factor or factors defined in the biennial
appropriations act. The economic trends and conditions factor or
factors defined in the biennial appropriations act shall not be
compounded with the economic trends and conditions factor or factors
defined in any other biennial appropriations acts before applying it to
the operations component rate allocation established in accordance with
this chapter. When no economic trends and conditions factor or factors
for either fiscal year are defined in a biennial appropriations act, no
economic trends and conditions factor or factors defined in any earlier
biennial appropriations act shall be applied solely or compounded to
the operations component rate allocation established in accordance with
this chapter.
(8) Total payment rates under the nursing facility medicaid payment
system shall not exceed facility rates charged to the general public
for comparable services.
(9) 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: Inflation adjustments 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 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.
(10) 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.
(11) Effective July 1, 2010, there shall be no rate adjustment for
facilities with banked beds. For purposes of calculating minimum
occupancy, licensed beds include any beds banked under chapter 70.38
RCW.
(12) 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 74.46.501 and 2011 1st sp.s. c 7 s 6 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 based on the resident assessment instrument
completed by the facility and the requirements and limitations for the
instrument's completion and transmission (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) 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 specified by rule.
(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) Although the facility average and the medicaid average case
mix indexes shall both be calculated quarterly, the cost-rebasing
period facility average case mix index will be used 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. To allow for the transition to
minimum data set 3.0 and implementation of resource utilization group
IV for July 1, ((2011)) 2013, through June 30, ((2013)) 2015, the
department shall calculate rates using the medicaid average case mix
scores effective for January 1, ((2011)) 2013, rates adjusted under RCW
74.46.485(1)(a), and the scores shall be increased each six months
during the transition period by one-half of one percent. The July 1,
((2013)) 2015, direct care cost per case mix unit shall be calculated
by utilizing ((2011)) 2013 direct care costs, patient days, and
((2011)) 2013 facility average case mix indexes based on the minimum
data set 3.0 resource utilization group IV grouper 57. Otherwise, a
facility's medicaid average case mix index shall be used to update a
nursing facility's direct care component rate semiannually.
(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
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
semiannually shall be from the calendar six-month period commencing
nine months prior to the effective date of the semiannual rate. For
example, July 1, 2010, through December 31, 2010, direct care component
rates shall utilize case mix averages from the October 1, 2009, through
March 31, 2010, calendar quarters, and so forth.
NEW SECTION. Sec. 3 (1) For fiscal years 2014 and 2015 and
subject to appropriation, the department of social and health services
shall do a comparative analysis of the facility-based payment rates
calculated on July 1, 2013, using the payment methodology defined in
chapter 74.46 RCW, to the facility-based payment rates in effect June
30, 2010. If the facility-based payment rate calculated on July 1,
2013, is smaller than the facility-based payment rate on June 30, 2010,
the difference shall be provided to the individual nursing facilities
as an add-on payment per medicaid resident day.
(2) During the comparative analysis performed in subsection (1) of
this section, if it is found that the direct care rate for any facility
calculated under chapter 74.46 RCW is greater than the direct care rate
in effect on June 30, 2010, then the facility shall receive a ten
percent direct care rate add-on to compensate that facility for taking
on more acute clients than they have in the past.
(3) The rate add-ons provided in subsection (2) of this section are
subject to the reconciliation and settlement process provided in RCW
74.46.022(6).
NEW SECTION. Sec. 4 This act is necessary for the immediate
preservation of the public peace, health, or safety, or support of the
state government and its existing public institutions, and takes effect
July 1, 2013.