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PA Bulletin, Doc. No. 11-1062


Nursing Facility Assessment Program for Fiscal Year 2011-2012

[41 Pa.B. 3302]
[Saturday, June 25, 2011]

 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) 2011-2012.


 Article VIII-A of the Public Welfare Code (code) authorizes the Department of Public Welfare (Department) to impose an annual monetary assessment on private and county nursing facilities in this Commonwealth each fiscal year through FY 2011-2012. See 62 P. S. §§ 801-A—815-A. Under Article VIII-A of the code, the Department may impose the assessment only to the extent that the assessment revenues qualify as the State share of Medical Assistance (MA) Program expenditures eligible for Federal financial participation (FFP). See 62 P. S. § 803-A. To ensure receipt of FFP, Article VIII-A requires the Department to seek a waiver from the Federal Centers for Medicare and Medicaid Services (CMS) if necessary to implement the Assessment Program. See 62 P. S. § 812-A. For FY 2011-2012, the Department submitted a request to CMS for an amendment to the Assessment Program. The implementation of the changes to the Assessment Program is contingent on CMS's approval of the request.

 For each fiscal year that the Assessment Program is implemented, the code authorizes the Secretary of the Department (Secretary) to determine the aggregate amount of the assessment and the annual assessment rate in consultation with the Secretary of the Budget. See 62 P. S. § 804-A. The law specifies that annual assessment rates must be sufficient to generate at least $50 million in additional revenue, but not more than the maximum aggregate assessment amount that qualifies for Federal matching funds. See 62 P. S. § 805-A.

 The Secretary must publish a notice in the Pennsylvania Bulletin before imposing an annual assessment for a FY. The notice must specify the amount of the assessment being proposed, explain the proposed assessment methodology, identify the estimated assessment amount and aggregate impact on nursing facilities subject to the assessment and provide interested persons a 30-day period to comment. See 62 P. S. § 805-A.

 This notice announces the assessment amounts, rates and methodology that the Department is proposing to implement in FY 2011-2012 and the estimated aggregate impact on nursing facilities that will be subject to the assessment in FY 2011-2012.

Proposed Assessment Methodology and Rates

 During FY 2011-2012, the Department is proposing to maintain the same assessment methodology that was used in FY 2010-2011.

 The following nursing facilities will continue to be exempt from the Assessment Program in FY 2011-2012:

 (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 grandfathered Continuing Care Retirement Community (CCRC) nursing facilities.1 The other rate will apply to all other nonexempt facilities, including nursing facilities that began participation in a CCRC on or after July 1, 2010. Using the applicable rate, the Department will calculate each nonexempt facility's quarterly assessment amount by multiplying its assessment rate by the facility's non-Medicare resident days during the calendar quarter that immediately proceeded the assessment quarter.

 The Department also proposes to increase the assessment rates for nonexempt nursing facilities from the rates in FY 2010-2011. The proposed assessment rates for FY 2011-2012 are as follows:

 (1) For county nursing facilities, for nursing facilities that have 50 or fewer licensed beds, and for grandfathered CCRC nursing facilities, the assessment rate will be $6.59 per non-Medicare resident day.

 (2) For all other nonexempt nursing facilities, the assessment rate will be $28.04 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 $434.130 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 laws and regulations.

Public Comment

 Interested persons are invited to submit written comments regarding the contents of this notice to Marilyn Yocum, 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 2011-2012. 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).

Acting Secretary

Fiscal Note: 14-NOT-699. No fiscal impact; (8) recommends adoption.

[Pa.B. Doc. No. 11-1062. Filed for public inspection June 24, 2011, 9:00 a.m.]


1  The Department will consider a nursing facility to be a grandfathered CCRC nursing facility if it meets either of the following:
 (1) The nursing facility was assessed the CCRC assessment rate prior to July 1, 2010, and continues to qualify for the CCRC assessment rate under the guidelines under which it was approved for the CCRC rate.
 (2) The nursing facility was not assessed at the CCRC assessment rate prior to July 1, 2010, but the nursing facility meets all of the following:
 (i) The nursing facility submitted a request to the Department to be assessed at the CCRC rate on or before June 23, 2010.
 (ii) The CCRC which controls or owns the nursing facility submitted an application for a certificate of authority (COA) to the Insurance Department on or before June 23, 2010.
 (iii) The nursing facility demonstrates that the CCRC incurred significant costs prior to June 5, 2010, in pursuing certification as a CCRC. (Examples of significant costs include costs incurred to obtain plan or site reviews, an enforceable construction contract, lease, contract for consulting services, zoning and certificate of occupancy.)
 (iv) The nursing facility qualifies for the CCRC rate under the criteria in effect for FY 2009-2010 published at 40 Pa.B. 767 (February 6, 2010).
 (v) The CCRC receives a COA during FY 2010-2011.
 A detailed explanation of a grandfathered CCRC nursing facility is contained in the notice published at 40 Pa.B. 7297 (December 18, 2010), which is available online at

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