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PA Bulletin, Doc. No. 01-1177



Notice of Change in Methods and Standards of Setting Payment Rates to Nursing Facilities

[31 Pa.B. 3478]

   On October 30, 1999, the Department of Public Welfare (Department) announced its intention to make changes to its methods and standards for payment to Medical Assistance (MA) nursing facility services relating to the purchase or rental of certain medically necessary exceptional Durable Medical Equipment (DME) (See 29 Pa.B. 5657). The purpose of this announcement is to describe the additional changes the Department intends to make to its payment methodology as a result of the public comments it received following its October 30, 1999, notice.

   Currently the Department pays MA nursing facility providers on a per diem rate basis for services provided to MA residents. These per diem rates include a capital component that is based upon the fair rental value of the nursing facilities' allowable fixed and movable property. The facilities' fair rental value is subject to the capital component payment limitation contained in 55 Pa. Code § 1187.113 (relating to capital component payment limitation) commonly known as ''the moratorium.''

   Under the new payment policy, the Department will remove allowable movable property costs from the fair rental value calculation. Movable property will be divided into two classes based on acquisition cost: minor movable property (items with an acquisition cost of less than $500) and major movable property (items with an acquisition cost of $500 or more). Allowable minor movable property costs will be included in the appropriate cost center of the net operating portion of the nursing facilities' per diem rates. Allowable major movable property costs will be included in a new movable property component in the capital portion of the nursing facilities' per diem rates. In addition, allowable movable property costs will not be subject to the capital component payment limitation contained in 55 Pa. Code § 1187.113. Nursing facilities' movable property capital rate component will be based upon their most recent audited cost report in the NIS database.

   The primary purpose of these additional changes in payment methodology is to remove perceived disincentives for nursing facilities to purchase movable property items necessary to serve their MA residents. These changes are part of the Department's continuing efforts to assure that MA nursing facility residents receive their care and services allowing them to attain and maintain their highest practicable physical, mental and psychosocial well being in accordance with applicable law, including the Nursing Home Reform Law (42 U.S.C.A. § 1396r) and Title II of the Americans with Disabilities Act (42 U.S.C.A. §§ 12131--12134). These additional changes to the Department's movable property payment methodology will begin to take effect starting with the July 1, 2001, rate setting cycle.

   The Department discussed and solicited input on the proposed additional changes in payment methodology at the Long Term Care Subcommittee meeting of the Medical Assistance Advisory Committee (MAAC) on October 11, 2000, and the MAAC meeting on October 26, 2000. These meetings were open to the public.

   Following those public meetings, the Department mailed copies of draft regulations incorporating the changes to its payment methodology to members of the MAAC and the Long Term Care (LTC) Subcommittee and Consumer Subcommittee of the MAAC on November 9, 2000, and asked interested persons to comment on the proposed changes. The Department received 80 comments in response. In addition, the Department discussed and solicited input on these changes at the MAAC meeting held on March 22, 2001, the LTC Subcommittee meeting held on April 11, 2001, and the Consumer Subcommittee meeting held on April 25, 2001. All of these meetings were open to the public.

   The Department intends to publish final regulations under section 204(1)(iv) and (3) of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. § 1204(1)(iv) and (3)) known as the Commonwealth Documents Law and 1 Pa. Code § 7.4(1)(iv) and (3) (relating to omission of notice of proposal rulemaking) and to submit a State Plan Amendment incorporating the final regulations into the Commonwealth's approved Medicaid State Plan. Payment under these changes is conditioned upon publication of the final omit regulations and the Health Care Financing Administration's approval of the State Plan Amendment.

   A copy of this notice and the draft regulations setting forth the intended changes to the Department's payment methodology is available for review at the local County Assistance Offices throughout this Commonwealth, on the Office of Medical Assistance Programs' website at or by contacting Gail Weidman in the Program Analysis and Review Section at (717) 705-3705. Although the Department intends to adopt these changes as final regulations, notice of proposed rulemaking omitted, the Department invites interested persons to submit written comments regarding these changes to the Department within 30 days of the date of publication of this notice in the Pennsylvania Bulletin. Comments should be addressed to Department of Public Welfare, Office of Medical Assistance Programs, Attention: Program Analysis and Review Section, P. O. Box 2675, Harrisburg, PA 17105.

   Persons with a disability may use the AT&T Relay Service by calling (800) 654-5984 (TDD users) or (800) 654-5988 (Voice users). Persons who require another alternative should contact Thomas Vracarich in the Office of Legal Counsel at (717) 783-2209.


   Fiscal Note:  14-NOT-297. (1) General Fund; (2) Implementing Year 2001-02 is $2,007,000; (3) 1st Succeeding Year 2002-03 is $2,177,000; 2nd Succeeding Year 2003-04 is $8,314,000; 3rd Succeeding Year 2004-05 is $18,631,000; 4th Succeeding Year 2005-06 is $19,501,000; 5th Succeeding Year 2006-07 is $19,501,000; (4) 1999-00 Program--$693,625,000; 1998-99 Program--$721,631,000; 1997-98 Program--$617,252,000; (7) Medical Assistance--Long Term Care; (8) recommends adoption. Funds are included in the budget for this purpose.

[Pa.B. Doc. No. 01-1177. Filed for public inspection June 29, 2001, 9:00 a.m.]

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