§ 1163.53a. Prospective capital reimbursement system.
(a) The Department defines allowable depreciation and interest costs for buildings and fixtures under Medicare cost reimbursement principles in 42 CFR Part 413 (relating to principles of reasonable cost reimbursement; payment for end-stage renal disease services). Costs for major moveable equipment are not included in allowable depreciation and interest costs for purposes of this section, but are included as part of the prospective payment rate for operating costs.
(b) The Department will pay for allowable depreciation and interest costs for buildings and fixtures—capital costs—as an add-on percentage to each hospital’s prospective payment rate.
(c) The add-on percentage is the case-weighted Statewide average percentage of capital costs to operating costs. The Department will determine the add-on percentage by the following method:
(1) For each hospital, determining MA allowable acute care inpatient operating costs by subtracting MA allowable acute care inpatient capital costs and MA allowable acute care inpatient medical education costs from that hospital’s total MA allowable acute care inpatient costs.
(2) For each hospital, dividing MA allowable acute care inpatient capital costs by that hospital’s MA allowable acute care inpatient operating costs.
(3) For each hospital, multiplying the ratio determined under paragraph (2) by the number of reported MA acute care inpatient cases at that hospital.
(4) Adding the products determined under paragraph (3) for all hospitals.
(5) Dividing the sum obtained under paragraph (4) by the Statewide number of reported MA acute care inpatient cases.
(d) For Fiscal Years 1993-94—1994-95, the Department has established an add-on percentage of 6.58%, on the basis of data reported on Hospital Cost Reports (MA 336) for Fiscal Year 1990-91.
(e) Hospitals that qualify as exceptional hospitals are eligible to apply for additional reimbursement for capital costs.
(1) A hospital will be identified as an exceptional hospital if one of the following conditions exists:
(i) The hospital’s total number of reported acute care inpatient MA days for Fiscal Year 1984-85 is greater than or equal to one standard deviation above the mean number of reported acute inpatient MA days for the general hospitals enrolled in the MA Program.
(ii) The hospital’s ratio of reported MA acute care inpatient days to its reported total acute inpatient days for Fiscal Year 1984-85 is greater than or equal to one standard deviation above the mean ratio of MA acute inpatient days to total acute inpatient days for the general hospitals enrolled in the MA Program.
(2) A hospital that is determined to be exceptional under paragraph (1) is eligible for additional reimbursement only if it meets the following conditions:
(i) The hospital requests additional reimbursement for the fiscal year by submitting the information necessary for the Department to determine the hospital’s eligibility for additional reimbursement and the amount of the additional reimbursement.
(ii) For the fiscal year for which additional reimbursement is being requested, the hospital’s ratio of MA allowable acute care inpatient capital costs to the hospital’s MA total allowable acute care inpatient operating costs is equal to or greater than 6.58%, the Statewide ratio of capital costs to total operating costs as determined under subsections (c) and (d). For purposes of calculating a hospital’s individual ratio, the hospital’s allowable inpatient acute care capital costs shall include allowable inpatient capital costs for buildings and fixtures placed in service prior to October 1, 1986, and allowable inpatient acute care capital costs for projects placed in service on or after October 1, 1986, only if the project has a Certificate of Need which was approved on or before June 30, 1987.
(3) For exceptional hospitals that qualify for additional reimbursement in accordance with paragraph (2), the Department will recognize as allowable costs, the following:
(i) Allowable MA inpatient acute care capital costs for buildings and fixtures placed in service prior to October 1, 1986.
(ii) Allowable MA inpatient acute care capital costs for buildings and fixtures placed in service on or after October 1, 1986, only if the project has a Certificate of Need approved on or before June 30, 1987.
(4) The Department will determine the interim capital payment of an exceptional hospital using the cost information submitted to the Department by the hospital as part of the hospital’s exceptional payment request.
(5) For exceptional hospitals that qualify for additional reimbursement under paragraph (2), the final payment amount will be the hospital’s allowable MA inpatient acute care capital costs determined under paragraph (3) subject to the following limitations:
(i) If a hospital’s inpatient acute care occupancy rate is less than 70% for the fiscal year being audited, the Department will reduce the hospital’s full allowable MA acute care inpatient capital costs by a factor determined by dividing the hospital’s total inpatient acute care days for the fiscal year by the product found by multiplying the hospital’s total available inpatient acute care bed days for the fiscal year by 0.70. For purposes of calculating the hospital’s occupancy rate, the Department will include set up and staffed bed-days and patient days related to units reimbursed under the prospective payment system in this subchapter.
(ii) The Department will compare a hospital’s MA allowable acute care inpatient capital costs incurred since October 1, 1986, to the Department’s capital payments to the hospital since October 1, 1986—hospital specific payments plus Statewide percentage payments. If capital payments exceed capital costs, the Department will deduct the difference from the hospital’s MA allowable capital costs incurred in the fiscal year for which additional reimbursement is requested.
(6) The Department will not offset interest income earned from funded depreciation accounts in calculating additional reimbursement for MA allowable acute care inpatient capital costs for hospitals that qualify as exceptional hospitals. The funded depreciation account shall be established under Medicare principles at 42 CFR Part 413.
Authority The provisions of this § 1163.53a amended under sections 201 and 443.1(1) of the Public Welfare Code (62 P. S. § § 201 and 443.1(1)).
Source The provisions of this § 1163.53a adopted November 7, 1986, effective retroactively to July 1, 1986, 16 Pa.B. 4397; amended June 1, 1990, effective retroactively to July 1, 1986, 20 Pa.B. 2913; amended June 18, 1993, effective July 1, 1993, 23 Pa.B. 2917; amended October 29, 1993, effective July 1, 1993, 23 Pa.B. 5241. Immediately preceding text appears at serial pages (181831) to (181832).
Cross References This section cited in 55 Pa. Code § 1163.51 (relating to general payment policy); and 55 Pa. Code § 1163.70 (relating to changes of ownership or control).
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