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PA Bulletin, Doc. No. 10-1050



Nursing Facility Assessment Program for Fiscal Year 2010-2011

[40 Pa.B. 3026]
[Saturday, June 5, 2010]

 This notice announces the proposed assessment amount, the proposed assessment methodology and the estimated aggregate impact on nursing facilities that will be subject to the assessment under the Nursing Facility Assessment Program (Assessment Program) in Fiscal Year (FY) 2010-2011.


 In 2003, the Pennsylvania General Assembly amended the Public Welfare Code to authorize the Department of Public Welfare (Department) to implement a monetary assessment on private nursing facilities in this Commonwealth over a 4-year period beginning July 1, 2003, and ending June 30, 2007. Act of September 30, 2003 (P. L. 169, No. 25) (Act 25), codified at 62 P. S. §§ 801-A—815-A. Since the implementation of the Assessment Program, the Department used the Assessment Program revenue to support payments to Pennsylvania's Medical Assistance (MA) nursing facility providers. Recognizing the substantial benefits realized through the Assessment Program, the General Assembly enacted Act 16 of 2007 to reauthorize the Assessment Program for an additional 5 years. Act of June 30, 2007 (P. L. 49, No. 16) (Act 16). In addition to reauthorizing the Assessment Program, Act 16 amended the Public Welfare Code to allow the Department to include county nursing facilities in the Assessment Program effective July 1, 2007. Id., 62 P. S. § 802-A. For FYs 2007-2008, 2008-2009 and 2009-2010, the Department exercised its discretion to include the county nursing facilities in the Assessment Program. The Department will continue this practice for FY 2010-2011.

 For each FY that the Assessment Program is implemented, the Secretary of the Department (Secretary), in consultation with the Secretary of the Budget, must determine the aggregate amount of the assessment and the annual assessment rate. The aggregate amount and rate of assessment must be approved by the Governor's Office. The annual assessment rates must be sufficient to generate at least $50 million in additional revenue, subject to the maximum aggregate assessment amount that qualifies for Federal matching funds. See section 804-A of Act 25 (62 P. S. § 804-A).

 Before implementing the Assessment Program in a FY, the Secretary must publish a notice in the Pennsylvania Bulletin that specifies the amount of the assessment being proposed, provides an explanation of the assessment methodology and assessment amount, and identifies the aggregate impact on nursing facilities subject to the assessment. See section 805-A of Act 25 (62 P. S. § 805-A).

 Additionally, the Department must seek approval from the Federal Centers for Medicare and Medicaid Services (CMS) to implement the Assessment Program in conformity with Federal law and to guarantee that the assessment amounts qualify for matching Federal funds. See 62 P. S. § 812-A. To assure that revenues generated from the Assessment Program qualify for Federal matching funds, the Department submitted a request to CMS for an amendment to the Assessment Program for FY 2010-2011. The implementation of the changes to the Assessment Program is contingent on CMS's approval of the request.

 This notice announces the assessment amounts, rates and methodology that the Department is proposing to implement in FY 2010-2011 and the estimated aggregate impact on nursing facilities that will be subject to the assessment in FY 2010-2011.

Proposed Assessment Methodology and Rates

 During FY 2010-2011, the Department is proposing to maintain the same assessment methodology that was used in FY 2009-2010.

 The following nursing facilities will continue to be exempt from the Assessment Program in FY 2010-2011:

 (1) State owned and operated nursing facilities.

 (2) Veteran's Administration nursing facilities.

 (3) Nursing facilities that have not been licensed and operated by the current or previous owner for the full calendar quarter prior to the calendar quarter in which an assessment is collected.

 (4) Nursing facilities that provide nursing facility services free of charge to all residents.

 Under the proposed rate structure, the Department will assess nonexempt nursing facilities at two rates. One rate will apply to three categories of nursing facilities: county nursing facilities; nursing facilities that have 50 or fewer licensed beds; and nursing facilities that participated in a Continuing Care Retirement Community (CCRC) before July 1, 2010, and that continue to participate within that CCRC. The other rate will apply to all other nonexempt facilities, including nursing facilities that begin participation in a CCRC on or after July 1, 2010. Using the applicable rate, the Department will calculate each non-exempt facility's quarterly assessment amount by multiplying its assessment rate by the facility's non-Medicare resident days during the calendar quarter that immediately preceded the assessment quarter.

 Since the Nursing Facility Assessment Program began in 2003, the number of nursing facilities assessed at the lower CCRC rate has increased dramatically. Some facilities qualified for the lower CCRC assessment rate merely by adding a few residential units to create a continuum of care, but otherwise continued to operate as usual. Over the years, the Department adopted guidelines in an effort to confine the CCRC assessment category to those entities that operate as traditional CCRCs. Despite these efforts, the CCRC category has grown by 82%. Rather than reacting to each new scheme, the Department is proposing to eliminate the CCRC category prospectively to discourage nursing facilities from undertaking arrangements simply to qualify for a lower assessment rate. If this proposal is adopted, the Department will not approve any new requests for the CCRC rate made on or after July 1, 2010. The Department also intends to require nursing facilities that currently qualify for the CCRC rate to certify, upon written request, that they continue to qualify for the CCRC assessment rate pursuant to the guidelines under which they were approved. These changes will ensure that the assessment program continues to achieve its intended purpose of generating revenue to support medical assistance payments to nursing facilities while minimizing any potential financial harm to nursing facilities.

 The Department will continue to accept requests to be assessed at the CCRC rate. To process approvals before July 1, 2010, the Department must receive new requests for the CCRC rate no later than June 23, 2010.

 The Department also proposes to increase the assessment rates for nonexempt nursing facilities from the rates in FY 2009-2010. The proposed assessment rates for FY 2010-2011 are as follows:

 (1) For county nursing facilities, for nursing facilities that have 50 or fewer licensed beds, and for nursing facilities that participated in a CCRC before July 1, 2010, and that have certified continued participation within that CCRC, the assessment rate will be $4.05 per non-Medicare resident day.

 (2) For all other non-exempt nursing facilities, the assessment rate will be $25.50 per non-Medicare resident day.

Aggregate Assessment Amounts and Fiscal Impact

 The Department estimates that, if the proposed assessment rates are implemented, the annual aggregate assessment fees for nonexempt nursing facilities will total $390.726 million. The Department will use the State revenue derived from the assessment fees and any associated Federal matching funds to support payments to qualified MA nursing facility providers in accordance with applicable law and regulations.

Public Comment

 Interested persons are invited to submit written comments regarding the contents of this notice to Yvette Sanchez-Roberts, Department of Public Welfare/Department of Aging, Office of Long-Term Living, 555 Walnut Street, Forum Place, 5th Floor, Harrisburg, PA 17101-1919. Comments must be submitted within 30 days of publication of the notice. See 62 P. S. § 805-A. After considering the comments, the Secretary will publish a second notice announcing the final assessment rates for FY 2010-2011. The Department will not begin collecting assessment fees until after the publication of the final assessment rate notice.

 Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).


Fiscal Note: 14-NOT-642. No fiscal impact; (8) recommends adoption.

[Pa.B. Doc. No. 10-1050. Filed for public inspection June 4, 2010, 9:00 a.m.]

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