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PA Bulletin, Doc. No. 08-111



Nursing Facility Assessment Program for Fiscal Year 2007-2008

[38 Pa.B. 410]
[Saturday, January 19, 2008]

   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 in Fiscal Year (FY) 2007-2008.


   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 (Assessment Program). The act of September 30, 2003 (P. L. 169, No. 25) (Act 25), codified at, 62 P. S. §§ 801-A--815-A. Over the past 4 years, the Department used the Assessment Program revenue to maintain and augment 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 Law for an additional 5 years. Act of June 30, 2007 (P. L. 169, No. 16) (Act 16). In addition to reauthorizing the Assessment Program, Act 16 amended the Assessment Law to allow the Department to include county nursing facilities in the Assessment Program effective July 1, 2007. Id., 62 P. S. § 802-A.

   Before implementing the Assessment Program in a fiscal year, the Secretary of Public Welfare (Secretary) must publish a notice in the Pennsylvania Bulletin that specifies the proposed assessment amount, provides an explanation of the proposed assessment methodology, and identifies the aggregate impact on nursing facilities subject to the assessment. See 62 P. S. § 805-A. Additionally, the Department must seek such waivers from the Federal Centers for Medicare and Medicaid Services (CMS) as may be necessary 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.

Proposed Assessment Methodology and Rates

   As noted previously, Act 16 authorized the Department to include the county nursing facilities in the Assessment Program effective July 1, 2007. The Department carefully analyzed the impact of extending the Assessment Program to county nursing facilities and concluded that both the Commonwealth and MA nursing facility providers would benefit. The Department determined that including county nursing facilities in the Assessment Program would allow the Department to collect an increased amount of assessment revenues which, in turn, could be used to maintain MA payment rates.

   After consultation with the nursing facility trade associations, the Department submitted a waiver request to CMS in September 2007, to continue the Assessment Program for an additional 5 years and to implement assessments on county nursing facilities effective July 1, 2007. By letter dated November 28, 2007, CMS approved the Department's waiver request.

   Consistent with the approved waiver, the Department proposes to exempt the following nursing facilities from the Assessment Program in FY 2007-2008:

   (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 county nursing facilities, to facilities that have 50 or fewer beds, and to nursing facilities that participate in a continuing care retirement community (CCRC). The other rate will apply to all other nonexempt facilities. Each nonexempt facility's quarterly assessment amount will continue to be calculated by multiplying its assessment rate by the facility's non-Medicare resident days during the calendar quarter that immediately precedes the assessment quarter. But for the inclusion of the county nursing facilities, this proposed rate structure is the same structure that was used in previous years.

   Although the Department intends to maintain the same basic rate structure for FY 2007-2008, the Department is proposing to increase the assessment rates for nonexempt nursing facilities from FY 2006-2007. Specifically, the Department proposes to implement the following assessment rates during FY 2007-2008:

   (1)  The proposed assessment rate for county nursing facilities and for nonexempt facilities that either have 50 or fewer beds or participate in a CCRC will be $2.40 per non-Medicare resident day.

   (2)  The proposed assessment rate for all other nonexempt nursing facilities will be $24.83 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 $413,643,000 for FY 2007-2008. The Department will use the State revenue derived from the assessment fees and any associated Federal matching funds to maintain and increase 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 Gail Weidman, Department of Public Welfare, Office of Long-Term Living, P. O. Box 2675, Harrisburg, PA 17105. 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 2007-2008. 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 AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).


   Fiscal Note: 14-NOT-538. No fiscal impact; (8) recommends adoption. Enactment of this regulation is expected to generate $413,643,000 in State revenue.

[Pa.B. Doc. No. 08-111. Filed for public inspection January 18, 2008, 9:00 a.m.]

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